US President Donald Trump has threatened to impose an additional 10 per cent tariff on nations who support the Brics alliance's policies that conflict with US interests.
Brics, an institution that was created to challenge the US and western Europe and improve nations' international status, has long been condemned by Trump.
He wrote on social media: “Any country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% tariff. There will be no exceptions to this policy.”
US officials now claim that countries will start working on a tariff agreement with the US on August 1, instead of the July 9 deadline.
The United States has only signed trade agreements with Vietnam and the United Kingdom thus far. But the United States and Britain are still at odds over levies on US imports of British steel.
Trump has declared a number of import levies on foreign goods since assuming office in January, claiming that these measures will safeguard American jobs and increase manufacturing.
After Brics members attacked US tariff practices and suggested changes to the International Monetary Fund (IMF) and the way major currencies are valued, Trump threatened to cut off relations with Brics countries.
What is Brics?
Brics is an acronym for Brazil, Russia, India, China, and South Africa. It's an intergovernmental organisation that brings together these five major emerging economies.
The term "Bric” was originally coined in 2001 by Jim O'Neill, an economist at Goldman Sachs, to describe the fast-growing economies of Brazil, Russia, India, and China. These countries held their first official meeting in 2006 and formed a formal grouping.
South Africa was invited to join the group in 2010, leading to the name change to Brics.
The primary goal of Brics is to promote peace, security, and development in the world. The alliance focuses on enhancing economic cooperation among member states, increasing trade and investment, and supporting each other’s growth.
Brics countries work together on various international issues, striving to have a stronger collective voice in global governance institutions such as the United Nations, the World Bank, and the International Monetary Fund (IMF).
The group has established financial institutions including the New Development Bank (NDB), also known as the BRICS Bank, which funds infrastructure and sustainable development projects in member countries and other developing nations.
Brics nations represent a significant portion of the world’s population (about 40 per cent) and economic output (over 20 per cent of global GDP). Their collaboration is seen as a counterbalance to the dominance of Western countries in international affairs.
Brics holds annual summits where leaders from the member countries discuss issues of mutual interest and set the agenda for future cooperation.
Which countries are part of Brics?
Brazil, Russia, India, and China are the founding members of Brics, while South Africa was the first country to join as part of the expansion in 2010. South Africa is the smallest member in terms of its economy and population.
As of September 2024, BRICS has expanded to include 10 countries. The six additional countries are:
- Argentina
- Egypt
- Ethiopia
- Iran
- United Arab Emirates (UAE)
These new members were invited during the 15th Brics Summit in August 2023, and their membership officially started on January 1, 2024.
Who else wants to join?
In September, Turkey became the first member of Nato to formally apply to join the emerging market Brics alliance.
The country applied in order to enhance its geopolitical standing with the East and West and diversify its foreign policy. As of writing, a decision is still yet to be made on Turkey’s membership.
“We do not have to choose between the European Union and the Shanghai Cooperation Organisation (SCO) as some people claim,” President Erdoğan said at the time.
“On the contrary, we have to develop our relations with both these and other organisations on a win-win basis.”
As of 2024, several countries have expressed interest in joining Brics or have been mentioned as potential candidates for future expansion. Some of these countries include:
- Algeria
- Bangladesh
- Indonesia
- Mexico
- Nigeria
- Turkey
- Pakistan
- Senegal
- Kazakhstan
- Thailand
These countries are attracted to Brics due to its focus on representing the interests of emerging markets and the Global South — and its efforts to create alternatives to Western-dominated global institutions.
Brics continues to evaluate the possibility of further expansion, considering the geopolitical and economic impacts of adding new members
Does Brics have its own currency?
As of now, Brics does not have a unified currency. The Brics nations use their national currencies for trade and financial transactions.
However, the group has discussed creating a common currency or alternative payment systems to reduce reliance on major Western currencies such as the US dollar.
One of the key initiatives related to financial cooperation among Brics countries is the New Development Bank (NDB), which was established to fund infrastructure and sustainable development projects in member countries and other developing nations. The NDB focuses on using local currencies to reduce dependency on the US dollar.
Additionally, BRICS members have explored promoting trade and financial transactions in their local currencies instead of using the dollar, but these efforts are still in the developmental or exploratory stages. The idea of a Brics currency remains speculative and would involve complex economic, political, and logistical considerations.
