Trump’s return to power raises questions over G7 ability to counter BRICS influence

In a rapidly shifting global economy, the rise of the BRICS bloc—Brazil, Russia, India, China, and South Africa—poses a significant challenge to Western economic dominance, The National Interest features in a recent article.

Trump's return to the White House could strengthen unity within the anti-Western bloc.

On November 30, 2024, President-elect Donald Trump made a bold declaration on X, announcing that the era of watching BRICS nations move away from the dollar was "OVER." His statement came a month after the sixteenth BRICS summit in Kazan, Russia, attended by representatives from thirty-six countries and six international organizations. Trump emphasized that any country attempting to replace the dollar with the BRICS currency or any other alternative would face "100 percent tariffs."

Trump’s bold threat comes at a critical moment in global economic relations, as numerous world leaders, including Russian President Vladimir Putin, have openly criticized the dollar’s role as a “weapon.” Furthermore, Trump’s proposal for 25 percent tariffs on Canada and Mexico, along with a 10 percent tariff on China, raises questions about whether this new wave of tariffs can preserve the dollar’s dominance and the financial supremacy of G7 institutions.

Originally coined by Goldman Sachs banker Jim O'Neill in a 2001 report, the term "BRICS" referred to a potential coalition of countries that could challenge, or even replace, the G7 nations. Now, the group has expanded and established parallel institutions, offering small and middle-power countries an alternative to the liberal international order. As of 2024, BRICS nations account for 34.9 percent of global GDP in terms of purchasing power parity (PPP), compared to the G7's 30.05 percent. In 2000, the G7's share was 43.28 percent, while BRICS made up only 21.37 percent.

Trump’s return to the White House has also raised concerns about whether the G7 nations, with an isolationist leader in Washington, can withstand the rise of the BRICS bloc. In a campaign rally in Wisconsin on September 8, 2024, Trump firmly condemned the de-dollarization of global trade, declaring, “You leave the dollar and you’re not doing business with the United States because we are going to put a 100 percent tariff on your goods.” This threat highlights why BRICS-aligned countries have been seeking alternatives to the dollar for the past sixteen years. During Trump’s first administration, Chinese State Councilor Yang Jiechi remarked in November 2017 that it had become “increasingly difficult for Western governance concepts, systems, and models to keep up with the new international situation,” adding that Western-led global governance had “malfunctioned” and reached a point “beyond redemption.”

It comes as no surprise that BRICS was formed in 2009, right after the 2008 global financial crisis. According to a Boston Consulting Group report, trade among BRICS economies has surpassed trade between BRICS and G7 nations. Representing half of the world’s population and accounting for between a quarter and a third of the global economy, the nine-country group has a fourfold purpose: (1) create an alternative financial system to the Western one, (2) better coordinate economic policy, (3) seek greater representation in global governance, and (4) reduce reliance on the US dollar.

By Naila Huseynova