If Trump wants to make headway with Russia and China he needs to have a more realistic approach towards the BRICS organisation and economic linkages between the organization’s member states. While the domination of the US dollar is likely to stay, countries will look at all available options given the fast-changing nature of the global economic order. If the US imposes tariffs and Trump begins to trade wars with other countries, several countries with reasonable ties with the US may begin to look at the opportunities offered by entering BRICS.
Ahead of his meeting with Indian PM, Narendra Modi on February 13, 2025, US President Donald Trump reiterated his warning to BRICS+ members that if they went ahead with plans for a common currency the US would not hesitate to 100% tariffs on these countries. Said Trump: “BRICS was put there for a bad purpose and most of those people don’t want it. They don’t even want to talk about it now. They’re afraid to talk about it because I told them if they want to play games with the dollar, then they’re going to be hit with a 100 per cent tariff”.
The primary reason for several countries, not just BRICS members, exploring trade in local currencies has been the imposition of stringent sanctions against Russia in the aftermath of the Russia-Ukraine war. For long, several countries especially Russia and China have often spoken about the ‘weaponisation’ of the US Dollar – or its hegemony and global domination.
BRICS currency: A far-fetched idea
Not all members of the BRICS grouping have been enthusiastic about a BRICS currency – the main reason being that they do not get embroiled in a China vs US geopolitical rivalry. It is not just India, but even Russia which has clarified that it has no plans of pushing for a BRICS currency. Last month, Kremlin spokesperson Dmitry Peskov said: “.. The point is that BRICS is not talking about creating a common currency, nor has it ever done so. BRICS is talking about creating new joint investment platforms that would allow joint investments in third countries, mutual investments and so on.”
Several commentators have also outrightly dismissed the idea of a BRICS common currency saying that it is untenable for both economic and geopolitical reasons.
Trump and the US-China-Russia triangle
Significantly, Trump has spoken about a possible meeting with Russian President Vladimir Putin, to find a solution to the Russia-Ukraine conflict, in Saudi Arabia. The US President held a 90-minute call with Putin on February 12, 2025, regarding the Russia-Ukraine conflict, and on February 16, 2025, said that this meeting could be “really soon”. During US Secretary of State Marco Rubio’s Saudi Arabia visit, talks about the Russia-Ukraine conflict were held with senior Russian officials including Russian Foreign Minister, Sergei Lavrov.
It would be pertinent to point out here that China had also offered to host talks between Trump and Putin. Trump has also proposed that the US, China and Russia cut their defence spending by 50%. The US President said that in his first meeting with Chinese President Xi Jinping and Russian President Vladimir Putin, he would say ‘Let’s cut our military budget in half’. It is unlikely that the two countries will accept Trump’s proposal. Still, if Trump wants to make headway with Russia and China he needs to have a more realistic approach towards the BRICS organisation and economic linkages between the organization’s member states.
Also Read: India-Indonesia Ties in Focus: Prabowo’s Visit, BRICS & Trump’s Tariff Warnings
Why countries are resorting to trade in local currencies?
The US needs to understand, however, that while several BRICS members themselves may not be in favour of a BRICS currency, they have no option regarding exploring trade in non-dollar currencies due to the stringent sanctions on Russia – which have been mentioned earlier. If sanctions against Russia are made less stringent, or removed altogether, countries may not be compelled to look at non-dollar options.
Why BRICS may be an attractive option for several countries?
Also, if the US imposes tariffs and Trump begins to trade wars with other countries, several countries with reasonable ties with the US may begin to look at the opportunities offered by entering BRICS. One recent example is the Philippines, where a senior policymaker proposed the Philippines’s entry into BRICS. Apart from tapping economic opportunities in China, one of the major advantages of entering BRICS is that there will be no strict conditionalities – at least theoretically. The expansion of BRICS and the entry of countries like UAE and, more recently, Indonesia has sent out a message that it is not merely an anti-Western bloc.
Conclusion
In conclusion, a common BRICS currency seems a stretch, but trade in non-dollar currencies cannot end overnight and the Trump administration needs to understand the same. While the domination of the US dollar is likely to stay, countries will look at all available options given the fast-changing nature of the global economic order. As mentioned earlier in a changing geopolitical environment, several countries may seek to enter the BRICS organisation – despite several of its limitations.
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