BRICS De-Dollarization Accelerates, Threatening US Dollar Dominance and Borrowing Costs

J.P. Morgan warns that BRICS nations' accelerated de-dollarization efforts could trigger higher US borrowing costs and weaken America's economic leverage. The shift away from the dollar is gaining momentum, with China's yuan surpassing the greenback in overseas transactions for the first time.

Recent US tariffs on India and Brazil—as high as 50%—have backfired, accelerating BRICS coordination to reduce dollar dependence. India's decision to halt American weapons purchases signals a strategic realignment, while Brazil's President Lula has been vocal in advocating for alternatives to dollar-dominated trade.

The dollar's global share shows clear decline, with BRICS nations actively diversifying reserves and trade settlements. This structural shift could force the US Treasury to offer higher yields on government debt, increasing financing costs at a time of already elevated deficits.