USA
Source: eir.news


There are three predictable outcomes of Trump’s aggressive crypto-tariff policy. I use the phrase “crypto-tariff” advisedly, because the imposition of sky-high tariffs left and right, especially on targeted BRICS countries, goes hand in hand with the frenzied expansion of cryptocurrencies to bail out the $2 quadrillion speculative bubble that is like a giant cancer in the trans-Atlantic financial system. The imposition of tariffs will loot the physical economies of the Global South and force huge flows of funds to the financial centers of the West (Wall Street and the City of London); and the crypto explosion is meant to prop up the unpayable financial bubble of those same centers. Note that the intellectual author of both policies is reportedly the current U.S. Secretary of Commerce, Howard Lutnick, who headed the leading financial services firm Cantor Fitzgerald from 1990 to 2025. Cantor Fitzgerald is a major player in the crypto craze, and manages the reserve assets of Tether, by far the largest crypto stablecoin.

The three foreseeable results are:

1) There are going to be involuntary defaults and moratoria on foreign debt payments by multiple countries in the Global South, because there will be sharp drops in their exports to the U.S. and other countries, and therefore their export revenues, as a result of the tariffs. The 20 BRICS countries (10 member and 10 partner nations) have a combined foreign debt of about $6 trillion—which is one important fuse, of many, that could ignite the $2 quadrillion financial bomb. With the wave of sovereign defaults, debtor countries will be pressured to accept agreements with the IMF, which will try to impose its hated austerity conditionalities. Victim nations will have to choose between going down with Wall Street and the City of London Titanic, or pursuing options independent of that Titanic, such as China’s Belt and Road Initiative and the collective approach of the BRICS. Expect major global realignments as a result.

2) The Global South will start to significantly reorient its trade flows, increasing exports to countries that do not impose tariffs on it, and importing from other countries in the Global South and Global East which are also victims of the crypto-tariffs. Intra-BRICS trade will be particularly favored. We will see tectonic shifts in these physical international trade flows in the coming months and years, as profound as those seen in the process of global de-dollarization since the start of the war in Ukraine. One example of such a tectonic shift is the importation of oil by India (which relies on imports for 87% of its domestic consumption): prior to 2022, less than 1% of India’s oil imports came from Russia; by June 2025, the Russian share had risen to over 43%.

3) There is going to be a hyperinflationary explosion in the U.S. (and Europe), partly because of the impact of tariffs on consumer prices in the U.S., but more fundamentally because of the expected $100 trillion or so surge in cryptocurrencies between now and 2030, which many “experts” project will result from the policies adopted by the Trump administration.

With those three processes already underway, that leaves two crucial pending questions about how the world will respond to that emerging financial reality:

(A) Will the Global Majority nations finally make the decisions required to establish new institutions for the issuance of large amounts of productive credit, protected from the speculation of the dollar system? What will be the nature and scope of the New Investment Platforms (NIP) that Russian President Vladimir Putin has proposed? What will be the role of the BRICS New Development Bank? In what currency will the new productive credit be issued? In short, will the Global Majority finally adopt a Hamiltonian credit system to replace the current bankrupt trans-Atlantic monetarist system?
(B) Will the countries of the Global North, such as the U.S., recognize that their self-interest as nations lies in cooperating with the BRICS, with the Global South, with the Belt and Road Initiative, for mutual benefit? Will they do so in time to avoid a thermonuclear war against Russia and China? Will the U.S. return to its own policy origins and once again adopt a Hamiltonian credit system to replace the current bankrupt monetarist system?

Fortunately, the answers to questions (A) and (B) above are not mutually exclusive or contradictory: there is a solution to the current crisis that is beneficial for both the North and the South. In fact, (A) is not possible without (B), and (B) is not possible without (A). A new international security and development architecture with those characteristics is both necessary and possible, as Helga Zepp-LaRouche has long argued.

To put the matter another way: If money were wealth, the law of the jungle (a zero-sum game) would in fact be scientifically correct, as the monetarists argue: my gain is your loss. Entropy prevails, and war is a certain outcome. But money is not wealth. True wealth comes from advances in the productive powers of labor as a result of man’s creativity, as Lyndon LaRouche proved, and for that reason the law of the jungle is scientifically false. We actually live in a universe that is not a zero-sum game, a world in which everyone can win. Anti-entropy prevails.

That is both the good news, and the task before us. We next turn to elaborate on the above points.

Sovereign Debt Defaults

Total global financial aggregates today total over $2 quadrillion. As Fig. 1 indicates, the lion’s share of that is financial derivatives, which EIR estimates rose to about $1.575 quadrillion at the end of 2024. The component of total world debt of all kinds was about $318 trillion and, within that category, total developing sector foreign debt was about $8.8 trillion.

The BRICS 20 nations accounted for about $5.0 trillion (56%) of that total. If we leave aside China’s $2.4 trillion foreign debt, which is arguably distinct from all the others, that leaves “only” $2.6 trillion in foreign debt of the other BRICS 20 nations.

It would be a mistake, however, to believe that the danger is minimal, since this $2.6 trillion is minuscule (a bit over 0.1%) compared to total global financial aggregates of $2 quadrillion. Actually, that $2.6 trillion functions as a fuse capable of igniting the entire $2 quadrillion explosive charge. In 2023, the developing sector as a whole had to pay $1.4 trillion in debt service payments (both interest and principal) on its debt of $8.8 trillion, of which $406 billion was interest payments. This was a shocking 30% increase over the amount of interest paid in 2022—in part due to soaring interest rates.
Fig. 2 shows the total debt and debt service payments (as a percentage of exports) of five select, representative BRICS countries. As can be seen, that debt service ratio climbs as high as 30% in the case of Egypt. This indicates an extreme vulnerability to default, as reductions of export earnings—as will unquestionably occur as a result of the Trump tariffs—will cut into the ability to service the debt.
Shifting Trade Patterns

Fig. 3 shows the U.S. tariff levels being applied (as of August 2025) to each of the indicated five BRICS nations, which range up to 50%, which is the case for India and Brazil—which together owe over $1 trillion in foreign debt. The table also shows the share of each country’s exports going to the U.S., as compared to its exports shipped to other BRICS nations. In all cases, those five nations export substantially more to other BRICS nations than they do to the U.S. The weighted average of all five is: 10% of their exports goes to the U.S. (where they face a weighted average tariff of a stunning 42%); 25% of their exports goes intra-BRICS.

Moreover, that spread has been widening over recent years, and it can be expected to do so at an accelerating rate as the Trump tariffs take hold. This also explains why there is growing discussion in the BRICS about forming a BRICS customs union, which would have uniformly low (or zero) tariffs intra-BRICS, with higher coordinated external tariffs outside the BRICS customs union.

None of this should come as a surprise. Today’s ten BRICS member states accounted for only 11% of total world exports back in 2001; today they account for about 25% of the world total.

But it is not only BRICS exports which will be radically shifting. Imports of products which are critical to each nation’s physical economy can be matters of life and death if they are cut off, and detailed studies and intense scrutiny of those specifics are now underway in most, if not all, BRICS nations. They are asking themselves questions such as:

What happens if we are subjected to full economic warfare and embargoes, like Russia, Iran, Venezuela, Nicaragua, Cuba and others have seen? How do we batten down the hatches if we are forced to adopt the equivalent of a war economy, as Russia had to do? These nations are looking at their national bill of materials for survival under conditions of such economic warfare. Are we self-sufficient in food and energy? If not, where can we buy grain and oil? What about steel, cement, fertilizer, tractors, and all-important machine tools and other high-tech capital goods? Who will help us build high-speed railroads, ports and dams? What can we gear up to produce ourselves over the next 5-10 years? Who else in the BRICS or other friendly nations can we rely on for help, technology transfer, and win-win trade?

Hyperinflation

It’s no secret that the Trump tariffs will translate into reduced U.S. imports, combined with the transfer of a large part (if not all) of the increased price of the remaining imported items onto the backs of U.S. consumers. But that will only be a minor component of coming sharp increases in prices, which will happen principally as a result of financial asset inflation unleashed by the planned flooding of the international financial system with some $100-200 trillion in worthless cryptocurrency over the next five years, as is widely forecast.

It is this crypto feature which also puts the lie to the oft-repeated mantra—a favorite of Donald Trump’s economic team—that tariffs will not only bring billions of dollars in revenue to the U.S. Treasury, but they will also lead to a rejuvenation of American industry, as the U.S. shifts to produce domestically what is now being imported.

Those who believe and retail this argument are either fools or liars—or both. First, there are many things that the U.S. is simply physically incapable of producing at this point, thanks to a half-century of aggressive deindustrialization policies at the hands of Wall Street and the City of London. We can’t build high-speed rail. We no longer produce machine tools at the needed scale. Our skilled labor force is aging and dying off. And on and on.

From a policy standpoint, the only way tariffs can help lead to industrialization is if they are coupled with a policy of massive productive credit generation—as was the case with Alexander Hamilton’s design of the American System. But there is no such credit policy in the U.S. today—exactly the opposite is the case. Of the $27 trillion in cumulative Quantitative Easing (QE) pumped into the trans-Atlantic system between 2008 and 2021, supposedly to stop the 2008 financial meltdown by providing fresh funds to banks so they could lend, exactly zero ($0.00) was used for productive investment. It all went to try to bail out the $2 quadrillion speculative bubble.

As Fig. 4 shows, QE had pretty much run its course as of about 2021, and an urgent financier-led drive was launched to pump new trillions of funny-money into the system, in the form of worthless, privately issued cryptocurrency (including so-called stablecoins)—up to $100 or even $200 trillion in new monetary assets by the year 2030, according to a number of sources, as Fig. 5 shows.
This will again be channeled entirely to feed the speculative bubble and further inflate it, with zero deployed for increasing physical economic productivity. Hence, hyperinflation. To think that this approach will solve our economic crisis is like loading a giant financial bazooka with $100 trillion, pouring concrete down its barrel so it can’t possibly go to productive investment, and then firing away.
Today’s promoters of crypto-tariffs are no smarter than Wile E. Coyote.

The LaRouche Action Plan

It is a distinct possibility that Washington’s crypto-tariff policy will backfire in ways that its proponents never imagined. Celso Amorim, the top international adviser to Brazilian President Lula da Silva, stated matter-of-factly that if Brazil can’t sell to the U.S., it will see if other markets, such as China, are available. President Lula himself stated that he would reach out to his Chinese and Indian counterparts, Xi Jinping and Narendra Modi, followed by other leaders. “I’m going to try to discuss with them about how each one is doing in this situation, what the implications are for each country, so we can make a decision…. There is no coordination among the BRICS yet, but there will be.”
The Indian government is also not amused by the 50% tariff placed on their exports to the U.S. That country’s Ministry of External Affairs warned: “It is therefore extremely unfortunate that the U.S. should choose to impose additional tariffs on India.… India will take all actions necessary to protect its national interests.” And there are further extensive discussions underway among the BRICS nations.

The BRICS 20 nations are well aware of the fact that they together represent 54% of the world’s population, and that they are strong—taken together—in other key physical economic parameters: 52% of global wheat production; 38% of oil; and nearly 75% of coal and steel (see Fig. 6). They are also aware that they can trade with each other using their own national currencies, rather than the toxic, speculation-ridden dollar, and they are increasingly doing just that. And they are studying technical mechanisms for establishing a unified clearing house and settlements system for their non-dollar trade.

The crucial, missing element—to date—is how to create new credit-issuing institutions that can provide massive flows of productive credit, while keeping those flows fully segregated from the $2 quadrillion speculative cancer. A new common unit of account or currency is needed as the vehicle for such credit flows, but this in no way replaces the proper ongoing role of the sovereign national currencies of the participating nations. In other words, the model of what needs to be done is emphatically not that of the European Union’s euro. As this author previously wrote in a 2023 article “Some LaRouche Essentials for Transition to a New International Financial System:”

There are three, central criteria that the new system and its currency must meet:1) Total separation between the new currency and participating national currencies, on the one side, and the predatory, toxic dollar on the other, i.e., no free convertibility between them. Exchange and capital controls become essential tools to achieve that result. For the United States, this means a return to Glass-Steagall, with its strict separation between productive credit and speculative activity.2) A fixed exchange-rate relationship between and among those participating national currencies and the new currency. Floating exchange rates have been a tool of financial speculation since August 1971, and they are anathema to long-term trade and investment cooperation among sovereign nations.3) Productive credit must be issued in that new currency to finance great development projects, with a heavy emphasis on science and advanced technologies, in and among participating nations, to quickly boost the physical economies and thereby provide the only possible solid backing for the value and stability of the new currency. Think Alexander Hamilton.

Those fundamentals still apply today, as the Global Majority deliberates over Putin’s New Investment Platforms and the needed role of the BRICS New Development Bank.

Finally, statesmen of the BRICS nations and the Global Majority must actively appeal to the United States and Europe, especially to their more thoughtful political leaders and movements, to join this win-win approach, and help make it clear that cooperation, not confrontation, is the best option for all parties involved. Crypto-tariffs may be the order of the day in Washington, but the voice of Alexander Hamilton—and of Lincoln, and FDR, and Lyndon LaRouche—has by no means been silenced, as the United States approaches its 250th anniversary.

Qatar
Source: www.aljazeera.com

China is the host of this year’s SCO Summit, which takes place in Tianjin from August 31 to September 1.

“No mountain or ocean can distance people who have shared aspirations,” China’s President Xi Jinping said in July 2024, addressing leaders from fellow Shanghai Cooperation Organisation (SCO) member states and a few other nations, in Astana, Kazakhstan.

At the time, the ancient Chinese saying in Xi’s speech seemed over the top and divorced from reality: Narendra Modi, prime minister of India, one of the SCO’s major members, was not even attending the grouping’s summit, citing a parliament session – an apparent snub to the bloc long driven by Beijing and Moscow.

Yet a year later, the geopolitical landscape looks very different: As China prepares to host the annual SCO summit, starting on Sunday, it is expecting a fuller house than ever of leaders from the region and beyond. Modi will visit China for the first time since 2018, amid a rapprochement that began late last year but has been propelled further by United States President Donald Trump’s 50 percent tariffs on Indian goods, which have forced New Delhi to seek stronger partnerships with Beijing and other players in Eurasia.

At a time when much of the world is grappling with the chaos unleashed by Trump’s tariffs and threats, analysts expect the SCO conclave to serve as a platform for Xi to project his country as a stabilising force, capable of uniting the Global South to counterbalance the West, particularly the US.
China’s Assistant Foreign Minister Liu Bin told a news conference in Beijing last week that the summit would be “one of China’s most important head-of-state and home-court diplomatic events this year”.

Where is it and who’s attending?

This year’s summit is set to take place from August 31 to September 1 in Tianjin, a northern Chinese city on the Bohai Sea.

Liu told reporters that the summit will gather more than 20 foreign leaders and the heads of 10 international organisations.

They include leaders of SCO member states: India’s Modi, Russian President Vladimir Putin, Iranian President Masoud Pezeshkian, Pakistani Prime Minister Shehbaz Sharif, Belarusian President Alexander Lukashenko, Kazakhstan’s President Kassym-Jomart Tokayev, Uzbekistan’s President Shavkat Mirziyoyev, Krygyz President Sadyr Japarov and Tajik President Emomali Rahmon.

Turkiye’s President Recep Tayyip Erdogan, Myanmar’s military chief Min Aung Hlaing, Nepal’s Prime Minister K P Sharma Oli, Indonesia’s President Prabowo Subianto, Malaysia’s Prime Minister Anwar Ibrahim and the Maldives’ President Mohamed Muizzu are among other leaders expected to attend.
United Nations Secretary-General Antonio Guterres and the Association of Southeast Asian Nations (ASEAN) Secretary-General Kao Kim Hourn will also attend the Summit.

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Is the SCO significant?

The SCO began in 1996 as a security bloc, dubbed the “Shanghai Five”. It was formed by China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan to settle their border disputes following the end of the Cold War and the collapse of the Soviet Union.

But in June 2001, the group evolved into the SCO, including Uzbekistan, with headquarters in Beijing. In 2017, the group expanded to include India and Pakistan. Iran in 2023 and Belarus in 2024 were also added as full members.

In addition, the organisation has 14 key dialogue partners, including Saudi Arabia, Egypt, Turkiye, Myanmar, Sri Lanka and Cambodia.

SCO member states account for 43 percent of the world’s population, and 23 percent – or almost a quarter – of the global economy.

But Alejandro Reyes, adjunct professor at the Department of Politics and Public Administration at the
University of Hong Kong, told Al Jazeera that the vision and identity of the group remain unclear.
The US led most post-World War II multilateral organisations – including the United Nations, World Bank and International Monetary Fund. But the end of the Cold War and the emergence of economies such as China, India, Brazil and South Africa have led to “diversification, if you will, of multilateralism, resulting in the formation of organisations like the BRICS seeking to give a voice to the Global South”, Reyes said. “So the SCO is also one of those new multilateral organisations.”

BRICS, the acronym derived from the initials of the founding member countries, Brazil, Russia, India, China and South Africa, sees itself as a forum for the Global South. It discusses geopolitics, global security and trade, among other world issues.

But while the SCO emerged with a focus on regional security, the expansion of its mandate to also discuss trade and other Global South concerns means it is difficult to understand what sets the grouping apart from organisations like the BRICS, Reyes said.

Manoj Kewalramani, chairperson of the Indo-Pacific Studies Programme at the Takshashila Institution in Bangalore, India, agreed with Reyes, saying that the SCO is “still an organisation that is looking for an identity”.

“At this point of time, the identity that they seem to be working out is something around the concept of indivisible security, which means the security for one cannot come at the cost of the other,” he told Al Jazeera.

Kewalramani pointed out that the SCO’s articulation of indivisible security is the complete opposite of NATO’s vision.

“The NATO vision is bloc-based collective security. The SCO vision is that everyone’s interests should
be taken into account whilst addressing global issues,” he said.

“The SCO vision is also an argument to the United States, saying, ‘Look, you are a major power. We are a major global power. You must respect our interests within at least our peripheries.’ So this is an argument of spheres of influence.”

What makes this summit especially relevant?

This year’s summit comes amid Russia’s ongoing war in Ukraine, Israel’s genocide in Gaza and continued occupation of the West Bank, security tensions in South Asia and the Asia Pacific region, and Trump’s global trade war.

With the world “clearly in deep flux”, Kewalramani said, “you’re likely to see China or Russia in particular, make the case that the world is entering an era of multipolarity, and articulate indivisible security as the way forward.

“The summit is also significant because I think that there is a belief amongst many that multilateralism is facing existential threats because of the United States’s policies, and that SCO countries still stand for multilateralism and not for unilateralism,” Kewalramani added.

Reyes said the significance also lies in the optics and symbolism of the summit with China as the host.

“This is a time when the US is burning bridges with almost every country. So, in President Xi’s mind, it is a good time for China to position itself as a world power by showcasing it has productive relations with many countries,” he said. “China always tries to make friends where it can.”

Two days after the SCO summit ends, Beijing will, on September 3, host a major military parade to commemorate the end of World War II in Asia. Many of the leaders arriving for the SCO summit – such as Putin, Lukashenko and Subianto – are expected to stay on for the parade. North Korean leader Kim Jong Un is also expected to travel to Beijing for the event, which will also be “a big part of this optic” of Xi hosting world leaders, Reyes said.

What are the SCO’s positions on key issues?

The grouping is often unable to agree on key geopolitical issues.

For instance, Russia has been able to get most SCO members to align with its interests when it comes to its war in Ukraine, but India has attempted to play a more balanced role – seeking peace and stronger ties with Ukraine, while also buying record levels of oil from Russia.

On Thursday, Ukraine’s Ministry of Foreign Affairs called on SCO members to “express their clear position” and “show that they respect the principles of international law, do not tolerate Russia’s war of aggression against Ukraine and the killing of Ukrainian children”, at this year’s summit.

Israel’s war in Gaza and military offensives in the occupied West Bank, Lebanon and Iran have also divided the SCO.

When the group condemned Israel’s attack on Iran this year, India, which also has strong ties with Israel, refused to endorse a joint statement.

Friction also persists between India and fellow SCO member Pakistan, with New Delhi calling on the organisation to condemn cross-border terrorism, for which it blames Islamabad. In July, India demanded that the grouping condemn the April attack by gunmen in Indian-administered Kashmir, in which 26 people were killed. New Delhi has accused Islamabad of being behind the attack, a charge that Pakistan has rejected.

When the SCO – whose decisions work by consensus – did not agree to that demand, India refused to sign a joint statement after a meeting of the grouping’s defence ministers.

Why are there divisions among SCO members?

According to Kewalramani, “different countries on the platform are there for different reasons.

“For example, the Central Asian countries joined because they had security concerns and were also keen to boost economic engagement with China. For India, addressing terrorism in the region was key,” he said.

While Beijing seeks to display a united approach at this year’s summit, Reyes reiterated that symbolism is likely to trump any really meaningful deliverables at the meeting.

“I doubt that this organisation is able to get much deeper than just the symbolism of gathering as a platform for the Global South, as a platform for Russia and China to convene to present themselves as senior partners in this Eurasian landmass,” he said.

“I think what we’re going to see is more about the optics of having all these countries together amid the United States’s absence.”

What does this mean for the US?

Trump has been critical of organisations from the Global South. In the past, he has threatened to cripple BRICS with targeted tariffs against its members, calling the grouping “anti-American”.
Reyes said the SCO Summit will be watched closely by the US and could also set the tone for the Quad Summit later this year, which India is set to host.

The Quad or Quadrilateral Security Dialogue was established by India, Japan, Australia and the US in 2007 to counter China’s growing influence in the Asia Pacific region. Over the past quarter-century, India has grown closer to the US and its allies, amid shared concerns over Beijing’s rise.

But after Washington hit New Delhi with 50 percent tariffs for importing crude oil from Russia amid the war in Ukraine, analysts expect the US to closely watch Modi’s meeting with Xi in Tianjin, scheduled for Monday.

“The US will be particularly watching the interaction between India and China, who have been trying to resolve bilateral tensions, at this year’s SCO Summit,” Reyes said.

“Currently, amid US tariffs on India and the upcoming Quad Summit, it will be interesting to see how Modi plays it,” he said.

Kewalramani cautioned against concluding that the India-US relationship was broken, even with their
tensions over tariffs.

“These are mature economies who have close relationships on many fronts. The US will be watching how not only India but also Pakistan, Iran, and, indeed, Russia and China interact among themselves at the SCO Summit on some of the key geopolitical issues and trade,” he said.

“I’m sure the US will grasp the messages that they need to grasp from the SCO Summit. It’s good for them to watch and take lessons.”

German
Source: www.dm.com

Donald Trump's tariffs on BRICS nations outstrip those on the rest of the world. As India, China and Russia meet Sunday for a key summit in Tianjin, has the president forged a tighter alliance among his biggest rivals?

Donald Trump has been accused of inadvertently drawing BRICS nations — a loose grouping of some of the world's fastest-growing emerging economies — closer together by imposing higher tariffs on them than on other countries.

China, the largest BRICSmember, still faces the prospect of a 145% tariff if it can't cut a deal with Trump, while Brazil and India have been slapped with a 50% rate — half of India's penalty is for buying discounted Russian oil. South Africa was given a 30% levy, and even newer members like Egypt could see their tariffs go up, due to their participation in BRICS.

Trump has repeatedly warned during the first seven months of his second term of additional punitive measures against any nation aligning with what he calls "anti-American policies" — a pointed reference to the BRICS' growing challenge to US global dominance.

Trump gave BRICS a 'shared incentive'

Former Indian trade official Ajay Srivastava thinks BRICS nations feel "little intimidation" from being singled out for additional penalties by Trump. He told DW that the tariffs "give BRICS a shared incentive to cut their reliance on the US, even if agendas differ."

Those additional tariffs have created a common grievance among BRICS members, who are now expanding bilateral trade agreements in national currencies to reduce dependence on the US dollar. BRICS central banks have also ramped up gold purchases, another signal of their desire to dedollarize.

While Trump has declared "BRICS is dead," one critic has accused the US president of "strategic malpractice," arguing that the Republican has turned a loose coalition of countries with vastly different objectives into a more unified bloc.

In a recent op-ed for The Washington Post, Max Boot, a foreign policy analyst at the Council on Foreign Relations think tank, said Trump was "diminishing US power by perversely uniting America's friends with our enemies" — a reference to how Brazil, South Africa and India are aligning more closely with China and Russia.

Xi, Modi, Putin to meet in China

A further display of the growing solidarity among BRICS members will be on show at the Shanghai Cooperation Organization summit in Tianjin, northern China, starting Sunday. Chinese President Xi Jinping will host his Indian and Russian counterparts, Narendra Modi and Vladimir Putin, along with leaders from around 20 other countries from the Global South. This will be Modi's first time on Chinese soil in seven years.

Ahead of the summit, the Kremlin has been pushing for China, Russia and India to hold their first trilateral talks in six years, a move that aims to strengthen the core of the BRICS alliance.

Moscow believes that reviving high-level dialogue among the three largest BRICS members could help quell long-standing tensions, especially between India and China, and present a more cohesive counterbalance to the West.

India recalibrates approach to China

Trump's huge tariffs have pushed New Delhi to strengthen economic ties with China, resuming direct flights, easing visa restrictions and increasing trade discussions. The two countries have also held talks to resolve long-standing disputes along their almost 3,500-kilometer (2,175-mile) de facto border.

During a visit to India last week by Chinese Foreign Minister Wang Yi, Beijing agreed to boost supplies of rare earth minerals to the South Asian country. China controls over 85% of global rare earth processing, while India urgently needs these minerals for clean energy, electric vehicles and defense technologies.

Despite backing each other to host the 2026 and 2027 BRICS summits, there are several reasons to doubt a significant improvement in Sino-Indian ties, given New Delhi's suspicions over China's ambitions in Asia.

Shilan Shah, deputy chief emerging markets economist at the London-based Capital Economics, cited China's close relations with India's main foe Pakistan and the construction of a Chinese hydropower dam on the Tibetan Plateau, which has caused unease in New Delhi. In addition, Shah wrote in a research note that "an influx of cheap Chinese imports" was "undermining India's efforts to strengthen [its] domestic industry."

India's mistrust of China and its longstanding ties with Washington could hurt ambitions to move the BRICS project forward. India still relies heavily on the US market and technology, with exports to the US totaling $77.5 billion (€66.46 billion) in 2024, versus much lower exports to Russia and China.
India, China to reset ties, but grievances remain

Other BRICS nations boost China ties

Brazil also sought to boost bilateral trade with China, its largest trading partner, during a phone call earlier this month between Xi and Brazilian President Luiz Inacio Lula da Silva. China accounts for 26% of Brazil's exports — double that of the US.

A highly symbolic appearance by Putin and Xi during Russia's Victory Day parade in May underscored the deepening strategic alignment between Moscow and Beijing. More than 90% of bilateral trade between Russia and China is now conducted in yuan and rubles, according to the Kremlin.

South Africa, meanwhile, remains steadfast in its BRICS commitments, signaling its intent to chart its own course despite pressure from Trump.

"I think South Africa is not willing to reverse any of its BRICS commitments, especially around global governance reform, technology, agriculture, academic exchanges and business-to-business exchanges," Sanusha Naidu, a senior research associate at the South Africa-based Institute for Global Dialogue, told DW.

Divergent ambitions within BRICS

Having grown from the original four to 10 members — with Saudi Arabia still undecided about joining — BRICS is now becoming increasingly fragmented due to diverging national interests, which could further limit its ambitions. It is also becoming more authoritarian.

Former Indian trade official Srivastava, who went on to establish the New Delhi-based Global Trade Research Initiative, said BRICS is "less about perfect unity and more about pragmatic cooperation in trade, finance and supply chains."

While trade among BRICS nations has been increasing faster than trade between BRICS and G7 countries, much of it is in hydrocarbons. The intra-BRICS trade is, interestingly, subject to more barriers than those that exist between countries in the Global North, according to research by the Boston Consulting Group.

The consulting firm identified future signs that BRICS trade cooperation was increasing, including a rollback of anti-dumping and other trade restrictions, moves toward a BRICS-wide free trade agreement, unanimous support for reforms to the World Trade Organization and more foreign investment among BRICS nations.

Intra-BRICS trade set for further growth

While those ambitions may not materialize immediately, Mihaela Papa, director of research and principal research scientist at the Center for International Studies, expects intra-BRICS trade to take on more urgency.

"We can expect greater political support for new trade initiatives, 'Buy BRICS' campaigns and projects like the BRICS grain exchange and the expansion of local currency settlement mechanisms," Papa told DW.

A Russian-backed proposal for a single BRICS currency to challenge the dollar remains on hold, suggesting a future shaped less by competing financial systems and more by a patchwork of overlapping networks.

Srivastava predicted that the dollar would stay "dominant for years, but parallel settlement systems in yuan, rupee and ruble will grow. This won't dethrone the dollar," he said, "but will steadily chip away at its monopoly."

Greece
Source: moderndiplomacy.eu

BRICS has moved to become a grouping with undeniable weight via its expanded membership, own financial institutions, and a growing role in global governance.

When the leaders of Brazil, Russia, India, and China first met in Yekaterinburg in 2009, the acronym “BRIC” was still fresh from Goldman Sachs’ coinage. Fifteen years later, BRICS has moved to become a grouping with undeniable weight via its expanded membership, own financial institutions, and a growing role in global governance. A central debate concerns whether BRICS is truly capable of reshaping global governance, or does it remain an informal talk shop?

The Global South and the BRICS Moment

The current international backdrop explains much of the renewed interest in BRICS. The international system is strained with geopolitical tensions that have eroded trust and trade wars undermining the rules-based order. Meanwhile, the material pressures on the Global South have deepened. According to IMF estimates, global debt has surged to over $102 trillion, with developing countries carrying around $31 trillion of that burden. Servicing these obligations leaves little fiscal space for essential investments in health, education, and climate adaptation. It is in this context of mounting global dysfunction that BRICS acquires significance. The grouping evokes both apprehension and appreciation. On the one hand, it is informal, diverse, and lacks the institutional muscle of established organizations. On the other, it gives voice to problems of the Global South that traditional forums sideline, from fertilizer shortages to women’s development. With Western climate commitments faltering, BRICS has the chance to position itself as the development-rooted climate voice of the Global South. Against this backdrop, the Global South increasingly looks to BRICS for alternatives that are people-centric, causing it to be cast as a rare “silver lining.”

From Brazil and India’s vantage point, BRICS should be understood less as an anti-Western bloc and more as a forum for political coordination among diverse partners. Despite the vastly different geographies and historical trajectories of its members, BRICS has converged on common goals of promoting health, education, and development. Brazil’s emphasis is on convergence advancing climate finance, research and development for vaccines, trade facilitation, and digital platforms. Crucially, BRICS insists that it is not designed as a platform against the West. This pragmatism is visible in Brazil’s foreign policy, where it positioned itself as a bridge-builder in North–South dialogue. At the same time, Brazil remains clear on core reforms. It advocates for a renewed push on multilateral trade, resists unilateral tariffs, and stresses the need to preserve BRICS’s role in peace and security debates. Importantly, both Brazil and South Africa support India’s longstanding demand for a permanent seat on the UN Security Council, signalling how BRICS could align around institutional reform even amidst differences.

If Brazil sees BRICS as a pragmatic bridge, India projects it as a vehicle for reform and tangible outcomes. BRICS’s strength lies in offering alternatives that are non-conditional and non-prescriptive. This is precisely what debt-distressed developing nations are seeking. India has already begun experimenting with local currency settlements. Over thirty such arrangements have been initiated and have sought to globalize its digital public infrastructure model. Unified Payments Interface (UPI) is being adapted for cross-border use, and India has encouraged BRICS members to explore similar low-cost, inclusive platforms. Such initiatives matter, as while debates about de-dollarization may be overstated, incremental expansion of local currency settlements could provide a real cushion for Global South economies. Under its upcoming chairship of BRICS in 2025, India plans to push for a people-centric agenda that prioritizes low-cost digital solutions, energy security through platforms like the International Solar Alliance, and women’s development. For India, BRICS is about producing scalable innovations that align with its domestic development model.

The Paradoxes and Future of BRICS

The promise and potential of BRICS cannot be separated from its paradoxes. The grouping presents itself as the collective voice of the Global South, and two of its most prominent members, China and Russia, are major powers with geopolitical agendas that frequently clash with the West. At the Rio Summit, Brazilian President Luiz Inácio Lula da Silva cast BRICS as the heir to the Non-Aligned Movement. In his view, BRICS is less a bloc of powers than a platform for multipolarity capable of promoting reform, mediating conflict, and creating space for diverse models of development. Yet practice often deviates from this aspiration. For India, Brazil, and South Africa, BRICS functions best when it advances pragmatic reforms within existing multilateral structures. By contrast, China and Russia frequently emphasize BRICS as part of a broader contestation against Western dominance. Questions were raised about the absence of Presidents Xi Jinping and Vladimir Putin at the Rio summit. Their absence did not diminish the weight of their countries within the forum but rather highlighted the way geopolitics shapes BRICS’ credibility.

China in particular has sought to place itself at the center of the grouping’s institutional architecture. From the New Development Bank and the Asian Infrastructure Investment Bank to the BRICS Pay system, Beijing has promoted platforms that, while formally multilateral, align with its wider agenda of strengthening South–South connectivity, expanding infrastructure finance, and reducing reliance on the dollar. These initiatives allow China to reshape global governance incrementally from within BRICS, even as it avoids projecting the grouping as overtly anti-Western. Russia, however, has pursued a different approach. Within BRICS, Moscow has carved out the role of mediator between China and India while simultaneously using the platform to push overtly anti-Western narratives. The contrast between the 2024 Kazan summit, hosted by Russia, and the Rio summit could not have been sharper. In Kazan, Moscow positioned BRICS as a vehicle to counter sanctions, accelerate de-dollarization, and champion what it calls the “world majority” against Western hegemony. In Rio, by contrast, the rhetoric was more restrained, reflecting Brazil’s emphasis on convergence rather than confrontation. These tensions complicate the grouping’s trajectory. On the one hand, BRICS’s recent expansion signals its growing appeal as an alternative forum. On the other, enlargement risks diluting coherence and aggravating internal differences.

Proposals for institutionalization, such as creating a BRICS Secretariat, reflect recognition that the grouping must move beyond informality if it is to deliver concrete outcomes. The ultimate test for BRICS will be delivery. The New Development Bank has shown that finance can be extended without the intrusive conditionalities of Bretton Woods institutions. Currency settlements and digital payment linkages from India’s UPI experiments to Brazil’s calls for renewal of intra-BRICS trade platforms are steps in the right direction. BRICS as a silver lining captures both its promise and its precarity. For Brazil, the grouping’s value lies in seeking convergence; for India, the emphasis is on institutionalization and delivery. BRICS is admired outside as an emerging counterweight but is wrestling within with the contradictions. BRICS should seek to consolidate its role as a supplementary pillar of global governance where it normalizes non-conditional finance, enables plural pathways of development, and foregrounds the priorities of the Global South that are sidelined elsewhere.