Deals over Rules: US Economic Statecraft and the BRICS Dilemma

By Giovanni Spina

Giovanni Spina is a visiting PhD student with Ghent Institute for International and European Studies (GIES) and a PhD candidate with the University of Catania.

This paper examines the shift in US economic statecraft during Donald Trump’s second term and its implications for BRICS cohesion and global economic governance. It argues that tariffs and secondary sanctions function as instruments of coercive bargaining that weaponize structural interdependence and exploit asymmetric exposure among BRICS members to the US economy. The analysis traces three dynamics: the strategic logic of Trump’s coercive strategy, BRICS diplomacy during tariff escalation, and the energy sector as one of the primary operational areas for order contestation. Paradoxically, US pressure exposes intra-BRICS vulnerabilities while simultaneously incentivising the group’s cohesion.

Introduction

Trump's second mandate has reintroduced a high level of unpredictability into the international system. The new US administration has adopted a unilateral and mercantilist posture, justifying this shift through the need to defend American national interests. Such a posture systematically weaponizes interdependence in the international system (Newman et al., 2021) and is put into practice through constant threats to impose tariffs or sanctions.

Among the targets of Trump’s administration, the BRICS group (Brazil, Russia, India, China, South Africa, Egypt, United Arab Emirates, Ethiopia, Indonesia, Iran, and the hedging Saudi Arabia) occupies a central position, and it is openly portrayed as “anti-American” (Reuters, 2025c), and its strategy has consisted in leveraging the varying economic and political relations of BRICS countries with the US, attempting to undermine the group’s cohesion.

These dynamics are systematically relevant, as beyond the clear political and economic weight of all the actors, Trump’s geopolitical posture disregards the principles of the liberal international order, while the BRICS group comes from a relatively long trajectory of order contestation.

This contribution offers initial thoughts about how Trump’s strategy affects BRICS cohesion and its positioning in the global economic governance. The analysis proceeds through three sections: the strategic logic of weaponized interdependence; the BRICS collective response to the 2025 tariff crisis; and energy trade as the operational front where geopolitical contestation materializes most concretely.

Divide and bargain?

The Trump administration has adopted a strategy that prioritizes coercive dynamics over multilateral coordination. In this context, foreign economic policy instruments—specifically tariffs—have shifted to function as coercive mechanisms through which the US seeks to compel other actors. The trade deficit is framed as a national security concern (Reuters, 2025b), with tariffs deployed simultaneously as a deterrent to preserve dollar hegemony (Shakil, 2025) and as an explicit bargaining instrument (Reuters, 2025d), in order to generate a strategic dilemma where compliance with the American demands appears preferable to sustaining the costs of escalation.

Moreover, through secondary sanctions, by threatening repercussion on third countries that maintain economic relationships with sanctioned states, the US can extend its power beyond its borders. In this context, the economic relations, with Russia after the 2022 conflict, have become a sensitive issue for BRICS members. China and India, in particular, have benefitted from discounted Russian oil import, while Brazil maintains profitable agricultural exports with Russia. Indeed, the dependence of the global economy on the US and the global reliance on the US dollar and financial infrastructures give Trump a significant leverage over countries that are not aligned with the US agenda.

Not all BRICS members are equally dependent on the US economy, granting Trump varying bargaining power over individual states. In particular, sanctioned members (Russia, Iran), as the effects of sanctions declines over time (Sanus et al., 2024), are less vulnerable to the US coercion compared to the other member states. On the opposite, India, with deeper economic (and also political) ties with the US, appears more vulnerable to economic coercion. In this context, Trump’s strategy toward BRICS can be described as mainly through bilateral pressure points that generate strategic dilemmas between political alignment and economic costs.

In general, Trump’s tariff and sanction policy has been quite inconsistent, with tariffs being announced and revoked several times. Nonetheless, his aversion toward BRICS has been explicit since the beginning. In the early days of his second mandate, Trump threatened 100% tariffs on BRICS countries if they pursued a currency agreement meant to replace the US dollar (Reuters, 2024). Later on, he added he would impose tariffs on countries aligning with the BRICS group (Shalal et al. 2025). Over the year, Trump reinitiated a war tariff against China, among other countries (Shalal et al. 2025) showing a more aggressive policy compared to his first mandate. Also, in terms of secondary sanctions, he threatened tariffs against countries importing oil from Venezuela, a measure that would also affect India and China (Verma and Renshaw, 2026).

Trump’s attempts to fragment BRICS have particularly targeted India, the most vulnerable member given its economic interdependence with Western countries. In particular, the US threatened secondary tariffs against India addressed its purchase of Russian crude; the bargain ended with India allowing to diversify away from Russia in exchange for lower tariffs (Lawder & Ahmed, 2026). Similar bargaining dynamics occurred with Indonesia (Harahap, 2026) while, interestingly, no sanctions have been threatened against the UAE and Saudi Arabia. Egypt and Ethiopia fall under the general tariffs announced by the US, but no specific measures have been adopted (Lawder & Hunnicutt, 2025).

Unity without Escalation: Diplomatic Signalling in BRICS

Faced with direct economic coercion, the group convened an extraordinary summit to discuss a common response to US tariffs. This constituted an unprecedented diplomatic act, as BRICS had never mobilized in response to economic emergency. Although no joint statement was expected, the event reveals the BRICS position vis-à-vis the Trump administration within the broader framework of global economic governance.

First, while all BRICS members converged on condemning unilateralism, there was no explicit mention of the US. At the diplomatic level, this arguably reflects the hedging position of India—whose leader was the only one absent, to avoid further tensions with the US. This, of course, reveals how BRICS heterogeneity—in this case, varying political and economic connections with the US—can push the group to adopt a low-profile stance.

At the same time, none of the statements pressured for an escalation. In this regard, over the year, some members initially adopted retaliatory measures, as in the case of China (Hunnicutt et al., 2025), others adopted a negotiating stance, such as (the already mentioned) India and Indonesia. In general, all of the statements adopted a stance in favour of multilateralism, and Brazil – which held the presidency – called for deepening intra-BRICS economic cooperation (BRICS Brazil Editorial Team, 2025). In practice, the scale of the response remains limited as no direct countermeasures were announced.

However, BRICS support for multilateralism is revealing about the fracture in the global governance. Clearly, on the one hand, it works as a diplomatic stance to avoid the consequences of a full-scale escalation. In fact, the WTO is questioned by Trump’s administration itself, which paralyzed the Appellate Body during the first mandate. Also, BRICS countries typically engage with practices that preserve their policy space rather than comply with international liberal principles. Furthermore, BRICS countries typically adopt practices preserving policy space rather than complying with international liberal principles. Here, the WTO – and the broad international trade practices – face contestation from both directions: the US—the leader of the liberal world—deliberately pursues unilateral practices, while BRICS continue their trajectory of contestation, advocating for radical institutional reform, which would entail maintaining a core WTO framework alongside differentiated treatment granting policy autonomy to developing countries (BRICS, 2025).

In this context, supporting multilateralism and a (reformed) WTO offers BRICS two advantages. First, this position diplomatically counterbalances US coercion, advocating for stable rules that, even if suboptimal, remain preferable to coping with a constant adversarial climate. Second, as the US retreats from the centre of global governance, BRICS could—at least theoretically—fill the vacuum. Furthermore, given the paralysis of the WTO, supporting it entails minimal domestic costs for BRICS, as its decisions cannot be enforced, but allows the group an international reputation gain. In this regard, the critical question is whether BRICS can seize the opportunity to lead the reform of the WTO.

Settling away from the dollar?

The dynamics of Trump’s tariffs and sanction strategy and BRICS reactive stances are very visible in energy trade. BRICS countries have a central position in the global energy dynamics. In fact, the group comprises the major consumers and producers of energy, showing a significant complementarity in terms of trade (Ma & Chen, 2022). At the same time, energy trade is a plausible operational channel through which BRICS operationalize their agenda of reducing their reliance on the US dollar. In fact, a large share of intra-BRICS bilateral energy trade is settled outside the dollar (Reuters, 2025a; Verma & Ahmed, 2023), especially between Russia and China and India. BRICS expansion brought in the heavy weights of Gulf petrostates. With the admission of the UAE, Iran, and Saudi Arabia – which has hedged on membership but remains fully engaged in the group’s diplomacy, the group represents 44% of the global oil reserves (BRICS 2025a).

Although Trump’s strategy is not explicitly designed to target fossil fuels, his sanction threats, especially secondary ones, are aimed at those countries which are either trading fuels with states that are sanctioned by the US or that the US perceives as adversarial, as in the case of India’s import of Russian crude.

The post-2022 sanctions further emphasized the risk of interdependence and structural dependence on the US dollar and financial systems. In that regard, the energy and financial dimensions of the global system are to interact with the changing geopolitical circumstances. For Russia in particular, the reliance on the BRICS partners was crucial in deflecting the sanctions.

Trump’s strategy cannot but clash with BRICS interests. As a group, BRICS identity in the global energy dynamics is based on the acknowledgement that they constitute the world’s major importers and exporters and have called against unilateralism also in energy markets (BRICS, 2025b). Also, due to the centrality of oil in sustaining the dollar hegemony (Schwartz, 2016), BRICS dedollarization of energy trade will affect the US power in the long run. Moreover, as the post-2022 dynamics have shown, global energy markets may fragment into more-or-less independent trading blocs, as the EU redirects energy demand (previously oriented toward Russia) toward the United States (Russel 2025) and intra-BRICS energy trade expands.

However, the pace of this process will depend on the capability of BRICS to act as a unitary actor. While BRICS energy cooperation is steadily institutionalizing through diplomatic and technical tracks and talks about dedollarization are most operationally plausible in fuel trade, it also true that BRICS rapid increase in energy-trade was rather transactional than strategic, as it was sustained by Russia’s discounted exports.

In fact, Trump’s policy is having divergent effects on BRICS core members. While China is actively redirecting energy imports away from the US (Russel 2025), India keeps hedging between the two sides and, as the recently signed agreement shows, threats of tariffs have been effective. Therefore, the two largest BRICS (and world) consumers are reacting differently to Trump’s threats based on their varying interdependence with the US.

On the other hand, as an organization, BRICS is articulating its own agenda. On the financial level, while a common currency does not appear on joint statements, talks are active toward the development of a BRICS alternative financial ecosystem, including alternative settlement platforms, reinsurance systems (relevant in the case of shipping) and trading platform that include fossil fuels.

Infrastructural problems must also be considered since replacing the dollar with national currencies is not always straightforward, as the talks between Russia and India about settlement in rupees have shown (Ahmed & Bhat, 2023). Pressure for dedollarization can be different among members, with sanctioned states calling for an accelerated pace. The geopolitical pressure might accelerate the process, and it is not surprising that the issue of financial infrastructure appears central to India's 2026 BRICS presidency.

In the energy sector, and at its intersection with the US dollar, Trump’s presidency seems accelerating pre-existing trends – calling for intra-BRICS trade and reducing the reliance on the dollar, while at the same time highlighting certain pre-existing divergences and vulnerabilities of the group. In that regard, BRICS energy strategy appears reactive insofar as Trump’s threats are concerned, but its undergoing process of institutionalization, started in 2015 through energy ministerials and the later creation of dedicated cooperation platforms, makes it part of a larger cooperation framework, rather than merely the result of external pressures.

Conclusion

The first year of Trump’s second mandate has led to an apparent paradox: the historical architect of the liberal international order now operates as its principal destabilizer, while BRICS—long positioned as institutional outsiders—defend multilateral mechanisms against unilateral coercion. These dynamics will be certainly relevant to the evolution of the global system.

Perhaps this situation has given BRICS a renewed sense of purpose (Stuenkel & Gabuev, 2025). It pushed the group at the centre of global dynamics and demonstrated that BRICS could have crisis-coordination capacity. However, the absence of effective countermeasures and the different vulnerabilities of the member states (particularly regarding dollar-denominated trade and secondary sanctions exposure) suggests that economic coercion is effective, at least to a significant extent.

Still, it is doubtful that Trump has inflicted any damage to the group. As long as BRICS behaves as a flexible, consensus-based group it would be hard to destroy it from the outside, as being part of the organization has low costs but leaving it would lead to diplomatic and potentially economic damage.

Also, there are limits to US pressure. The cases of Saudi Arabia, which has not formally ratified its membership but continues to engage with the group, and India, which has partly accommodated US demands, show that the organization is resilient. Moreover, the ambition to act as a reformist coalition at the upcoming WTO interministerial meeting, alongside India’s priority of placing financial infrastructure at the centre of its 2026 presidency agenda, suggests that the group remains committed to its objectives.

What Trump’s pressure clearly reveals instead is that BRICS cooperation remains largely incremental and reactive on major issues. As the US keeps undermining global stability and retreating from the centre of global governance, BRICS might indeed be pushed to the centre of the discourse. Whether this positional advantage translates into effective leadership remains uncertain. The critical question is not whether BRICS will assume leadership, but whether, and how, the group can generate the institutional mechanisms necessary to reform global governance.

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