U.S. President Donald Trump said he might increase U.S. tariffs on countries that align with the policies of BRICS, after the bloc of emerging markets criticized the "indiscriminate rising of tariffs and non-tariff measures, or protectionism under the guise of environmental objectives."
The U.S. president said on social media on Monday that "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." He did not provide more details or specify which policies he had in mind.
At a two-day summit hosted by Brazilian President Luiz Inácio Lula da Silva in Rio de Janeiro, the group welcomed new members and committed to strengthening multilateralism and reforming global governance, not least the World Trade Organization buffeted by Trump's global tariffs and trade war with China.
"The proliferation of trade-restrictive actions, whether in the form of indiscriminate rising of tariffs and nontariff measures, or protectionism under the guise of environmental objectives, threatens to further reduce global trade, disrupt global supply chains, and introduce uncertainty into international economic and trade activities, potentially exacerbating existing economic disparities and affecting prospects for global economic development," the bloc of nations said.
"We voice serious concerns about the rise of unilateral tariff and non-tariff measures which distort trade and are inconsistent with WTO rules."
Disputes over U.S. tariffs and dollar as reserve currency
BRICS is named for its five original members Brazil, Russia, India, China and South Africa. It now includes six more – Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia and the United Arab Emirates – plus 10 partner countries: Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Nigeria, Thailand, Uganda, Uzbekistan and Vietnam.
Trump announced punishing tariffs on almost every U.S. trading partner around the world in April, then paused them for 90 days in a bid to gain concessions. That pause, due to end this coming Wednesday, was extended until Aug. 1.
Trading partners that have not made a deal with the U.S. will receive letters notifying them of higher new tariff rates and "it could be 12, maybe 15" letters that are sent out, Trump told reporters. "We’re going to have a combination of letters and some deals have been made.”
In June, Trump also warned members of BRICS he would impose a 100% tariff against them if they try to replace the U.S. dollar as the world's reserve currency. The U.S. dollar accounts for about 58% of the world’s foreign exchange reserves, according to IMF data.
Having the world reserve currency grants the U.S. significant economic and political leverage, allowing it to borrow more cheaply, influence international diplomacy through financial tools like sanctions, and maintain stability in its own financial markets.
BRICS, which was formed in 2009 to counter the dominance of the U.S. and its Western allies, represents about half of the world's population and acts as a counterpart to the G-7 group of rich democracies.
