Is Trump the glue holding BRICS together?

Investing.com -- President Trump’s latest tariff moves against several BRICS members have pushed the bloc to speak more forcefully about unity, but deep political and economic divisions suggest limited prospects for meaningful integration.

The Trump administration’s decision to impose an additional 25% tariff on Indian goods linked to its purchases of Russian oil would lift India’s effective tariff rate to 36%, one of the steepest among major economies.

Brazil has also been hit with a punitive tariff, tied not to trade imbalances but to political disputes, including disagreements over the trial of former president Jair Bolsonaro and what Washington calls “attacks” on U.S. technology companies.

South Africa faces higher levies as well, partly reflecting tensions over its land reform policies.

What marks a shift this time is that Trump’s tariff salvos are directed at BRICS members that, historically, have had more cordial ties with Washington, including India, Brazil, and South Africa, macroeconomic research firm Capital Economics pointed out. 

These measures have stirred debate among BRICS members about the need to respond collectively. Brazil’s President Luiz Inácio Lula da Silva has been among the most outspoken advocates, even suggesting a joint response to U.S. tariff threats.

He and Chinese President Xi Jinping reportedly spoke for an hour last week, agreeing on the importance of “upholding multilateralism.”

India’s Prime Minister Narendra Modi is also expected to visit China later this month, his first trip there in seven years, in a sign of renewed dialogue.

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For now, though, most members remain focused on containing fallout in their bilateral relations with Washington.

“While U.S. tariffs may give an extra impetus to dialogue between the BRICS, they are so far only paying lip service to the idea of deeper cooperation,” Capital Economics said in a recent report.

Structural obstacles run deeper. Politically, China and India remain strategic rivals despite Modi’s planned visit. Their disputed Himalayan border continues to strain ties, while China’s construction of what will be the world’s largest hydropower dam in Tibet adds a fresh source of tension.

Economically, China dominates intra-BRICS trade, but its exports of manufactured goods to South Africa, Brazil, and India have often undermined local industries. India, in particular, has enacted more anti-dumping measures against China than any other country since 2020.

Trade flows outside of China illustrate the weakness of the bloc. Excluding Beijing, only 2-5% of exports from India, Brazil, and South Africa go to other BRICS members, compared with 8-18% shipped to the U.S.

Talk of a BRICS currency, another irritant for Trump, remains little more than rhetoric.

In practice, Trump’s tariffs may produce louder calls for BRICS solidarity, but the bloc’s fragmented interests stand in the way of real progress.

As Capital Economics concludes, “for as long as high tariffs remain in place, the diplomatic noise around the BRICS will be one of more cohesion. But we doubt this will preclude a tangible impact such as deeper trade ties, or a marked shift away from the dollar.”

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