Trump's Tariff War: The Full Story of the Clash with BRICS

The Geopolitical Impact of the Economic War Triggered by ‘America First’ Targeting BRICS in a Multipolar Era

• Background of Trump’s ‘America First’ and the rise of BRICS
• Tariff war cases by major BRICS countries and their impacts
• Unintended consequences of the tariff war on de-dollarization and the global economy

The Rise of BRICS: A Challenge to the Old Order

To understand the tariff war during Donald Trump’s era, we must first look at the world order before his rise. The emerging economies coalition BRICS had already established itself as a key player on the global stage.

From Investment Term to Political Bloc

BRICS originally was an investment term coined by Goldman Sachs in 2001 to describe the growth potential of Brazil, Russia, India, and China. However, following the 2008 global financial crisis, these countries grew skeptical of the Western-centric financial system and began to unite as a political entity.

Starting with their first summit in 2009, they aimed to reform governance institutions led by the US and Europe such as the United Nations (UN), International Monetary Fund (IMF), and World Bank, and to challenge the dollar-centered reserve currency system.

With South Africa joining in 2010, and Iran and the UAE in 2024, BRICS grew into a massive bloc representing about 45% of the world’s population and over 35% of global GDP (PPP basis). Notably, the establishment of the New Development Bank (NDB) and Contingent Reserve Arrangement (CRA) in 2014 was a concrete attempt to build alternatives to the Western-dominated financial order.

The Desire for a ‘Safe Harbor’

The rise of BRICS was a reaction against the US-centered unipolar system. For countries suffering from Western economic sanctions, the dollar-based financial system was perceived as a ‘weapon’ enforcing US foreign policy.

In this context, BRICS was seen as a ‘safe harbor’ from US economic pressure. Thus, BRICS-led de-dollarization was a pragmatic and defensive measure to secure economic sovereignty.

The Trump Doctrine: ‘America First’ and the Prelude to the Tariff War

“I will impose 100% tariffs”

President Trump threatened via social media that if BRICS challenged US dollar hegemony, he would impose such tariffs, dismissing BRICS as a “small group rapidly fading away.” This was a declaration based on the ‘America First’ philosophy.

The Architect of the Trade War, Peter Navarro

Behind the Trump administration’s tough trade policies was Peter Navarro, Director of the White House Office of Trade and Manufacturing Policy. His logic was straightforward:

1. China is the enemy: China is an ’economic aggressor’ destroying America’s industrial base through unfair means.
2. Trade deficits are a loss of national wealth: Trade deficits represent a net loss from GDP.
3. Tariffs are harmless: Tariffs are an effective bargaining tool to pressure foreign exporters.
4. Security and economy are one: Economic independence equals national security.

Personally, I view Navarro’s logic as an oversimplification of the national balance sheet into a household budget. Ignoring complex global supply chains and capital flows, he appealed to voters with the intuitive but risky logic that ’exports equal imports, imports equal spending.’ This simplicity was the source of his political power.

The Hidden Purpose of Tariffs

Trump’s tariff policy was less an economic strategy and more a core tool of populist politics. Imposing tariffs created a powerful political narrative of protecting Americans against an ’external enemy,’ effectively rallying key support bases like the Rust Belt. In other words, the real goal of tariffs was not improving trade balances but securing political momentum.

Case Studies: How Trump’s Tariffs Targeted BRICS

The Trump administration’s offensive was an economic war precisely aimed at the vulnerabilities of each BRICS country.

Full-Frontal Attack on China: The Dragon Under Crossfire

The primary target was China. While the official reason was to reduce the trade deficit, the essence was a tech hegemony war targeting China’s advanced industry plan, ‘Made in China 2025.’

The most powerful weapon in the 2018 US-China trade war was the ‘Entity List’ export control. In 2019, the US placed Chinese telecom giant Huawei on this list, cutting off US technology and component supplies. This dealt a severe blow to Huawei’s global supply chain but paradoxically spurred China to accelerate semiconductor localization and tech self-reliance.

Political Tariffs: Pressuring Brazil for Bolsonaro

Brazil’s case shows how blatantly Trump used trade policy as a political tool. Trump labeled the Brazilian judiciary’s investigation of former President Jair Bolsonaro, dubbed the ‘Trump of South America,’ as a ‘witch hunt,’ threatening to impose 50% tariffs on all Brazilian imports if the probe was not stopped.

President Lula of Brazil strongly condemned this as an “unacceptable violation of sovereignty.” This incident backfired, pushing Brazil away from US-centric diplomacy and strengthening ties within BRICS.

Market Access Pressure: Taming India

Trump called India the “tariff king” and sought to force open its protectionist market. The key weapon was revoking India’s Generalized System of Preferences (GSP) status. GSP grants duty-free benefits to developing countries, but in 2019 the US suspended India’s status, citing unfair market access for US companies.

This move hit over $6 billion worth of Indian exports annually. India had to confront the power imbalance, striving to maintain relations with its largest trading partner while resisting US pressure.

Loyalty Test: Punishing South Africa

Pressure on South Africa stemmed from political grievances over land reform and pro-Russian/Chinese foreign policy. The Trump administration threatened 30% tariffs that would nullify benefits under the African Growth and Opportunity Act (AGOA).

This made South Africa realize the risks of overdependence on the US market and prompted diversification of exports toward Europe, Asia, and stronger BRICS solidarity.

BRICS Tariff War Overview by Country

The Paradox That United a Divided BRICS

BRICS originally contained internal heterogeneity and conflicts. Yet, Trump’s indiscriminate offensive paradoxically provided them with a powerful unifying narrative of an ’external enemy.’

Would BRICS have been able to unite as they have without Trump’s pressure? Probably not. It’s like students with different personalities temporarily uniting because of a strict teacher. Trump’s policies masked fundamental internal conflicts (e.g., China-India border disputes) and served as a catalyst by giving them a temporary common goal of ‘anti-hegemony.’

Unintended Consequences: The Tariff War Accelerated De-dollarization

The greatest irony of Trump’s policy is that his threats to protect dollar hegemony actually became a catalyst for BRICS’ de-dollarization.

His threats were seen as proof that the US could weaponize its currency at any time, highlighting the risks of dollar dependence worldwide. Consequently, BRICS countries increased the share of their own currencies in settlements and actively discussed building alternative systems to bypass the US-led SWIFT network (e.g., ‘BRICS Pay’).

Trump’s policies shook the three pillars of a global reserve currency: trust, stability, and predictability. As a result, he provided China and Russia with their strongest argument to say, “The current system is unreliable, so let’s build our own.”

Everyone Loses: The Economic Scars of the Tariff War

Trump’s tariff war left deep wounds not only on BRICS but also on the US economy and the multilateral trade system as a whole.

Economic Shock and Damage to the Multilateral Trade System

Institutes like the Peterson Institute for International Economics (PIIE) warned that the tariff war was a ’no-winner game’ that reduced GDP in all involved countries. The US-China trade war caused real income losses on both sides.

The biggest victim was the multilateral trade system represented by the World Trade Organization (WTO). Trump bypassed WTO rules citing ’national security,’ paralyzing its dispute resolution function and undermining the foundation of a predictable and stable global trade environment.

Burden on US Consumers and Businesses

Trump claimed tariffs were taxes paid by foreigners, but in reality, almost all tariff costs were passed through US importers to American consumers. Ultimately, tariffs intended to “Make America Great Again” ended up draining the wallets of ordinary US citizens and businesses.

Conclusion: The Legacy and Future of the Tariff War

Trump’s ‘America First’ offensive paradoxically accelerated the emergence of a more divided and multipolar world. The legacy of the tariff war is clear and raises important questions for our future.

• Key Summary

  1. Reconfiguration of US-China Relations: Trump’s offensive turned US-China relations into an irreversible strategic rivalry.
  2. Weakening of the Multilateral Trade System: WTO’s authority was undermined, injecting unpredictability into the global trade environment.
  3. Unintended BRICS Cohesion: By creating an external enemy, Trump propelled BRICS’ de-dollarization and alternative system discussions.

If a second Trump term materializes, he has promised even stronger protectionist policies, including 10% tariffs on all imports and 60% on Chinese goods. This would mean an escalation of trade wars worldwide.

I hope this article helps you understand the tariff war and geopolitical shifts of the Trump era. What do you think about the potential impact of new trade conflicts on the global economy? Please share your thoughts in the comments.