The End of BRICS

The U.S. President-elect Donald Trump’s recent declaration to impose 100% tariffs on countries attempting to undermine the U.S. dollar system has sent shockwaves through the already fragile BRICS alliance. The threat, if acted upon, would deal a fatal blow to a bloc that has long struggled with contradictions and conflicting interests.

Initially presented as an alternative to Western-dominated global structures, BRICS was envisioned as a platform to reshape global financial and geopolitical situation. However, the alliance’s inability to find common ground, coupled with the vastly different priorities and dependencies of its member states, has left it increasingly irrelevant. Trump’s sanctions threat underscores the reality that BRICS, as an alliance, lacks the power needed to counter the dominance of the U.S. dollar or to present a united front.

China: The Export Giant with a Strategic Focus

For China, BRICS is less about partnership and more about securing access to global markets for its exports. The bloc offers a platform to strenthen China's role as a dominant export powerhouse, using the large markets of Russia, Brazil, and South Africa, which are major consumers of Chinese goods. Beijing shows little interest in fostering local economic development within BRICS, as it is reluctant to relocate manufacturing facilities to other member countries. Instead, China prefers to keep its production centralized, maintaining control over its industrial ecosystem.

China’s real strategic focus lies in its Belt and Road Initiative (BRI), an ambitious global infrastructure project designed to facilitate the rapid and reliable delivery of Chinese goods to international markets. Speedy delivery is a key competitive advantage for China, as it prevents other countries from developing their own industrial capacity and competing in mass production. By ensuring its products reach markets faster, China effectively limits the opportunities for domestic industries in other countries to grow.

To achieve this, China invests heavily in alternative logistical routes to reduce dependency on any single pathway. This strategy is critical as the United States works to rebalance its trade relationship with Beijing, imposing tariffs and encouraging the diversification of global supply chains. By building multiple infrastructure corridors, China aims to secure its trade from geopolitical disruptions and maintain its dominance in global manufacturing.

For Beijing, BRICS is just another tool to the Belt and Road Initiative. While the bloc provides a convenient platform for extending its influence, it serves more as a mechanism for market access than a partnership of equals. China's primary objective remains the expansion of its economic reach, securing its position as the world’s manufacturing hub, and preemptively stifling industrial competition from other nations.

India: Sitting on Two Chairs

India’s approach to BRICS reflects its dual strategy. A key advantage of the alliance lies in India's role as a conduit for Russian oil and gas, heavily sanctioned by Europe. Russia's energy exports to India have surged, providing Moscow with an alternative market and enabling India to secure discounted energy supplies. These supplies are often refined and reexported, generating significant profits for India.

At the same time, India's economy remains deeply anchored in its relationship with the United States. Indian exports of software services to the U.S. exceed $100 billion annually with a trend of 10 percent annual growth, with the U.S. serving as a vital trading partner for Indian goods. In a move to counterbalance China’s influence, the U.S. has also started relocating major manufacturing operations, such as Apple factories, from China to India. This strategic shift bolsters India's industrial sector and reinforces its alignment with Western markets.

India is thus navigating a delicate balance: capitalizing on the benefits of the Russian cheap oil nad gas while remaining heavily reliant on American markets and partnerships to sustain its economic growth trajectory.

However, recent statements of the U.S. President-elect Donald Trump, dismissing India’s IT sector with remarks such as "They can go find another sucker," present a new challenge. These comments highlight the fragility of India’s relationship with the U.S., raising questions about the sustainability of its dual alignment strategy.

The choice, however, appears evident. Long-term growth and stability lie in maintaining and strengthening ties with the U.S. and the broader Western bloc, whose markets and investments are indispensable to India’s future. While India benefits temporarily from facilitating Russia’s sanctions evasion, this strategy risks alienating the very partnerships that have fueled its rise as a global economic power. For India, prioritizing the long-term over short-term gains is not just a strategic necessity but an economic imperative.

Russia: Using BRICS for Political Survival

For Russia, BRICS has become a critical lifeline, enabling it to showcase that Western sanctions can be mitigated through alternative alliances. The bloc provides Moscow with a platform to assert its relevance in global affairs, even as its economy becomes increasingly isolated.

China and India’s roles as major buyers of Russian oil and gas have been pivotal. The energy trade has allowed Russia to redirect exports previously destined for Europe, thereby sustaining vital revenue streams. However, this dynamic highlights Russia’s constrained options: its primary exports within BRICS are raw materials—commodities that do not inherently require the structure of a trade alliance to find buyers.

Moreover, China and India view Russia not as a destination for investments or technology transfer, as Western nations once did, but merely as a market for their goods. This creates a fundamentally imbalanced relationship where Russia operates a rudimentary "oil-for-goods" strategy. Unlike the complex economic partnerships Russia previously enjoyed with Western nations, this transactional approach reflects a significant downgrade in its global economic engagements.

Brazil and South Africa: On the Sidelines

For Brazil and South Africa, the benefits of BRICS membership remain unclear. Both countries are heavily dependent on trade with the United States and rely on American technologies to sustain their economies.

Brazil’s trade with the U.S. far exceeds its trade with other BRICS members combined, and its primary exports—such as agricultural products—are not directly linked to the BRICS framework. Similarly, South Africa’s economic ties to the U.S. dwarf its trade with Russia or China. Both nations appear to participate in BRICS more for symbolic reasons than for tangible economic benefits.

Without a clear strategy for leveraging BRICS, Brazil and South Africa remain peripheral players in the alliance, further weakening its cohesion.

The Impact of Trump’s Sanctions Threat

BRICS, once touted as a counterbalance to Western dominance, has struggled to evolve into a cohesive and impactful alliance. The bloc’s internal contradictions, diverging priorities, and economic dependencies on non-BRICS countries—particularly the United States—have significantly undermined its effectiveness.

While China continues to use BRICS as a platform to expand its influence, the alliance offers little tangible benefit to its other members beyond symbolic gestures. In a global landscape still dominated by established economic powers and institutions, BRICS serves as a reminder that lofty ambitions require substantial economic and political alignment to succeed.

The recent announcement by U.S. President-elect Donald Trump regarding potential sanctions against countries attempting to undermine the dollar system has further weakened BRICS. This move has stifled discussions about creating a common currency or establishing an alternative financial system, effectively forcing the bloc to scale back its aspirations.

As a result, the future of BRICS as a unified entity appears uncertain. Trump's sanctions threat may have marked not just a retreat from bold declarations but potentially the end of BRICS as a significant global actor. The recent summit may well have been its last.