Professor of Critical Development Studies at the Faculty of Environmental and Urban Change, York University, Toronto. United States President Donald Trump has made no secret of his hostility towards BRICS. Last year, he threatened an additional 10 percent tariff on any country aligning itself with what he called the bloc’s “anti-American policies”. Since then, his administration has continued to wield tariffs aggressively against trading partners, including BRICS members such as Brazil, India and China.
The message appears straightforward: Countries that challenge US economic power should expect to pay a price. But coercion has consequences. And as BRICS leaders meet in New Delhi today, Trump may be strengthening the very incentives that made the bloc attractive in the first place. The more Washington demonstrates its willingness to use access to its markets, its financial system and the dollar as instruments of political leverage, the more reason other countries have to reduce their exposure to them.
This does not mean BRICS is becoming an anti-US alliance. Far from it. The bloc’s 11 members – Brazil, China, Egypt, Ethiopia, India, Indonesia, Iran, Russia, Saudi Arabia, South Africa and the United Arab Emirates – have enormous political and economic differences. Together, they account for nearly half the world’s population and about 40 percent of global gross domestic product, but they do not share a common ideology, security policy or even geopolitical orientation.
Recent events have made those divisions impossible to ignore. Iran, Saudi Arabia and the UAE find themselves on opposite sides of a growing regional conflict. In May, Iranian and Emirati representatives clashed during a foreign ministers’ meeting in New Delhi. India and China have had a heated border dispute that led to deadly skirmishes in 2020-2021; only in the past two years have their relations gradually stabilised.
So Trump is not producing a united geopolitical front against Washington. He may, however, be giving countries with otherwise divergent interests a common reason to cooperate economically: Protection against vulnerability to US power. For countries outside the Western core, dependence on US-centred economic infrastructure carries risks. The dollar’s centrality gives the US enormous structural advantages.
International transactions pass through financial institutions subject to US jurisdiction; access to US markets can be restricted; sanctions can isolate governments and companies from parts of the global financial system. BRICS’s efforts to diminish dependence on the US financial system do not mean the dollar is about to lose its position as a global reserve currency. This claim is often made around BRICS summits, usually accompanied by breathless predictions of a new BRICS currency. The evidence does not support it.
The dollar remains overwhelmingly dominant. According to the International Monetary Fund, it accounted for 57.1 percent of global foreign-exchange reserves in the first quarter of 2026. The Chinese renminbi accounted for just 2 percent. Indeed, the dollar’s share rose slightly during the quarter.
But replacing the dollar and reducing dependence on it are two very different things. BRICS countries are already experimenting with the latter. South Africa has connected to China’s Cross-Border Interbank Payment System, allowing transactions with China to be settled directly in renminbi. Brazil and China are increasingly using their own currencies in bilateral trade, while India and the UAE have settled transactions in rupees and dirhams.
China and Russia have shifted much of their bilateral trade into their national currencies. BRICS itself is also moving cautiously towards greater financial connectivity. Last year, its leaders called for continued work on a cross-border payments initiative and greater interoperability among members’ payment systems. In August, Reserve Bank of India Governor Sanjay Malhotra confirmed that BRICS countries are discussing linking their fast-payment networks and potentially their central bank digital currencies.
India itself is also encouraging greater use of the rupee in international trade. The New Development Bank offers another example. Established by the original BRICS countries as an alternative source of development finance, it has made lending in members’ currencies an explicit strategic objective. Its current strategy targets 30 percent of financing in local currencies, partly to reduce borrowers’ exposure to foreign-exchange risks and costly currency swaps; the number could increase to 40-50 percent for the next cycle, 2027-2031.
None of this amounts to a rival global financial system. Much of it remains experimental, bilateral or limited in scale. But that is precisely why the fixation on whether BRICS can “replace” the dollar misses what is happening. The more significant development is the gradual construction of options that allow governments and businesses to conduct a number of transactions without relying on the dollar and Western-dominated financial infrastructure.
Trump’s policies give this process additional urgency. Consider Brazil. Washington imposed a new 25 percent tariff on a range of Brazilian products in July, affecting billions of dollars in exports, despite running a trade surplus with the country. The Trump administration has also scrutinised Brazil’s hugely successful Pix instant-payment system, which competes with established card-payment networks.
Sanctions demonstrate the same vulnerability more dramatically. Russia and Iran have been pushed towards alternative payment and trading arrangements precisely because their access to Western financial networks has been restricted. Washington is now considering further measures that could penalise countries heavily reliant on Russian energy, including China and India. No BRICS member needs to sympathise with Moscow or Tehran to understand what this implies.
US financial power depends not simply on possessing the world’s largest economy or issuing its dominant currency. It also depends on other countries continuing to regard participation in a US-centred system as more advantageous than the alternatives. The more frequently Washington turns that system into an instrument of coercion, the stronger the incentive to construct escape routes from it. That said, most BRICS countries do not appear eager to exchange dependence on Washington for dependence on Beijing.
India maintains extensive relations with the US while buying Russian energy and pursuing closer economic cooperation within BRICS. Brazil has long sought greater autonomy without becoming a Chinese satellite. Saudi Arabia and the UAE remain deeply intertwined with Western economies while expanding their relationships with China. Their objective is less likely to be replacing one hegemon with another than increasing their ability to manoeuvre between competing centres of power.
That distinction matters. A trade transaction settled in rupees, a loan denominated in renminbi or rand, or a payment made through a system that does not depend on the same Western intermediaries will not overthrow dollar dominance. But multiply such arrangements across countries and over time, and they begin to reduce the costs of saying no to Washington. This is why portraying BRICS simply as an anti-US threat risks becoming self-defeating.
Punishing countries for seeking alternatives gives them another reason to develop those alternatives. Trump wants to make challenging US power costly. Instead, he may be making dependence on US power costlier still. The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.
