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Trump Threatens 10% Tariff on Nations Supporting BRICS – Escalation or Bluff?

Trump Threatens 10% Tariff on Nations Supporting BRICS – Escalation or Bluff?

Author:
AltH4ck3r
Published:
2025-07-08 13:26:02
14
1


In a dramatic escalation of trade tensions, former U.S. President Donald TRUMP has threatened to impose a 10% tariff on countries aligning with the BRICS economic bloc. The warning came hours before the conclusion of a summit hosted by Brazilian President Lula da Silva and followed Trump's contentious call with Vladimir Putin, which he described as "very disappointing." BRICS leaders responded cautiously, avoiding direct confrontation but emphasizing the bloc's strategic importance. The threat sent shockwaves through global markets, with currencies and stocks dipping early Monday. This article unpacks the geopolitical chess game, market reactions, and why BRICS—representing nearly half the world's population—is choosing silence over escalation.

Why Did Trump Target BRICS With Tariff Threats?

The 10% tariff proposal emerged as Trump voiced frustration over BRICS' growing influence. Five critical factors drove this move:

  1. The Putin Call Fallout: Trump's Thursday conversation with Putin left him convinced Russia "doesn’t want to stop" the Ukraine war, despite a subsequent "productive" Friday talk with Zelenskyy about air defense systems.
  2. Expansion Anxiety: The summit included Saudi Arabia, Malaysia, Nigeria, and Vietnam—nations Trump views as drifting toward BRICS' "anti-American" orbit.
  3. Economic Leverage: BRICS now accounts for 31.5% of global GDP (IMF 2024), challenging U.S. dollar dominance in commodities trade.
  4. Symbolic Timing: The threat coincided with the summit's final session, where BRICS criticized "military aggression" (a veiled Ukraine war reference) without naming the U.S.
  5. Market Manipulation? Traders noted suspicious options activity in USD/BRL futures before the announcement, per CoinGlass data.

How Did BRICS Leaders Respond to the Provocation?

BRICS adopted a "speak softly" strategy, exemplified by five key reactions:

  • Brazil's Diplomatic Jiu-Jitsu: Lula's advisor Celso Amorim framed tariffs as proof BRICS is needed: "We didn’t threaten the U.S.—they’re threatening us."
  • South Africa's Silent Exit: President Ramaphosa canceled bilateral talks with Lula, citing a "local crisis"—likely avoiding photo ops that might provoke Washington.
  • Malaysia's Balancing Act: Their Trade Ministry reaffirmed U.S. ties while maintaining "independent foreign policy"—classic non-aligned movement rhetoric.
  • Saudi Stonewalling: Foreign officials refused questions, reflecting OPEC+ members' delicate U.S.-Russia-China triangulation.
  • The Cryptic Communiqué: The summit’s final statement condemned tariffs generically, avoiding direct U.S. mentions—a tactic China perfected during trade wars.

What’s the Real Impact on Global Markets?

Monday’s opening bell revealed three immediate consequences:

Market Movement Source
USD/BRL +1.8% (Real weakened) TradingView
MSCI Emerging Markets -0.9% Bloomberg
Bitcoin +2.3% (Haven flow?) BTCC Exchange

Longer-term, analysts worry about fragmentation: "If BRICS countries settle trade in local currencies, dollar liquidity could tighten," noted a BTCC market strategist.

Is This a New Cold War Economic Front?

Four historical parallels suggest we’re witnessing a paradigm shift:

  1. 1971 Nixon Shock Redux: Trump’s tariffs echo Nixon’s dollar devaluation—both weaponize economic dominance during reelection bids.
  2. BRICS ≠ Warsaw Pact: Unlike Soviet alliances, BRICS includes democracies (Brazil, India) with deep U.S. business ties—Tesla’s Shanghai Gigafactory depends on BRICS minerals.
  3. The SWIFT Precedent: After 2014 Crimea sanctions, Russia developed SPFS (SWIFT alternative); now BRICS discusses a joint payment system.
  4. Commodities as Ammo: BRICS controls 45% of global oil (Saudi+Russia), 80% of lithium (China+Brazil), and 75% of rare earths—potential counter-tariff leverage.

FAQ: Decoding the BRICS-Trump Standoff

What triggered Trump’s 10% tariff threat?

The immediate trigger was BRICS’ perceived expansionism at the Brazil summit, but underlying causes include Trump’s frustration with Putin over Ukraine and long-standing concerns about de-dollarization efforts.

How credible is this tariff threat?

Legally dubious—the President lacks authority for blanket tariffs without Congressional approval (seeprecedent). However, Trump’s 2018 steel tariffs show he’ll test legal boundaries.

Why are BRICS leaders avoiding confrontation?

With members like South Africa ($81 billion in U.S. trade) and Saudi Arabia ($30 billion arms deals), direct clashes risk vital economic interests. Their silence is strategic, not fearful.

Could this accelerate cryptocurrency adoption?

Potentially. Bitcoin’s Monday surge suggests some see crypto as a "neutral" asset in trade wars—though BRICS’ proposed digital currency remains years from reality.

What’s the worst-case scenario?

A 1930s-style tariff spiral: If BRICS retaliates with export bans on critical minerals, iPhone production could face disruptions within months.

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