This comes after Brics adopted a joint declaration that, among other things, appeared to criticise US military strikes on Iran as well as ‘unilateral’ tariffs that had disrupted the international trade system. US President Donald Trump threatened countries aligning themselves with the “anti-American policies of BRICS” with an additional 10% trade tariff on Sunday. Trump made the announcement on his social media website, Truth Social, and said there would be no exceptions to the policy.
This comes after the grouping adopted a joint declaration that, among other things, appeared to criticise US military strikes on Iran as well as “unilateral” tariffs that had disrupted the international trade system. The joint declaration also expressed concern at the humanitarian situation in Gaza and called for Israel to withdraw its forces for Gaza and other “Occupied Palestinian Territory”.
India, a founding member of the BRICS grouping, has faced the Trump administration’s ire for the grouping’s policies in the past. It is unclear how Trump’s tariff threat will impact the ongoing US-India talks for a trade agreement. The grouping – which initially began as a coalition of emerging market economies including Brazil, Russia, India, China and South Africa – expanded to include 11 nations in 2023. The Trump administration’s concerns with BRICS stem from efforts by particular members – including Russia and China – to push for reducing global reliance on the dollar for international trade and finance. In the past, BRICS nations have welcomed efforts to transact more trade in local currencies instead of the dollar.
“It is important to continue expanding the use of national currencies in mutual payments. It is believed that creating an independent payment and monetary system within BRICS will expedite currency transactions while also ensuring their effectiveness and security. Furthermore, using national currencies in trade within BRICS is steadily growing,” said Russian President Vladimir Putin during his speech at the Plenary Session of the BRICS Leaders Level summit on Sunday.
Brazil’s President Lula Inacio Da Silva has also backed efforts to reduce dependence on the dollar. However, proposals for a common BRICS currency have been shelved. The Trump administration has taken a dim view of these efforts. “BRICS was put there for a bad purpose..I told them if they want to play games with the dollar, then they are going to be hit by a 100% tariff,” Trump said earlier this year.
“We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty US Dollar. Or, they will face 100 per cent Tariffs, and should expect to say goodbye to selling into the wonderful US Economy,” he said on another occasion in January.
The matter has also come up in the US-India relationship. In June, US commerce secretary Howard Lutnick said that India’s membership of BRICS was an irritant in bilateral ties.
For its part, India has been clear in its support for trade in national currencies between BRICS nations. However, it has nixed talks of creating a common BRICS currency in the past. Prior to the BRICS summit in 2023 in South Africa, then foreign secretary Vinay Kwatra clarified that talks between BRICS nations were not focused on a common currency. This clarification came after both Brazil’s President Lula and Russia’s foreign minister Sergei Lavrov expressed some support for the idea.
