As the United States hardens its tariff arsenal, the rest of the world organizes itself. Thus, the BRICS bloc attracts economies seeking strategic independence. Breaking with the established monetary order, this alliance redefines exchange circuits and weakens the dominance of the dollar. A silent but structuring change is taking place.
In summary:
1. New U.S. taxes on Chinese imports are leading many countries to move away from the Western financial system.
2. The BRICS bloc presents itself as a credible alternative to U.S. economic hegemony.
3. This dynamic is accompanied by an increasing willingness to reduce dependence on the dollar in international exchanges.
4. Concrete initiatives emerge to strengthen monetary autonomy and develop alternative payment mechanisms.
The U.S. tariff strategy: a catalyst for adjustments
Larry McDonald, founder of Bear Traps Report, highlights that the increase in U.S. tariffs against China, initiated under the Trump administration, is causing trade instability that accelerates the recent strategic shift of many countries towards the BRICS bloc.
It states that these measures "create a context in which countries feel compelled to move away from the Western financial system." This dynamic benefits the BRICS, which seek to offer a credible alternative to the Western model in terms of trade and economic governance.
The highlighted facts of this evolution include:
1. The reactivation of U.S. tariffs on Chinese products, especially in the technology and electric vehicle sectors.
2. McDonald's statement that "we are witnessing the largest geopolitical realignment since World War II"
3. The expansion of the BRICS bloc to countries such as Iran, Egypt, and the United Arab Emirates, which strengthens its demographic and economic weight.
4. The growing willingness of emerging countries to reduce their exposure to the dollar and to Western financial institutions such as the IMF.
This juncture illustrates how trade tensions can precipitate profound changes in international economic balances.
Towards a new monetary era?
Beyond trade, one of the central challenges for the BRICS is the gradual dedollarization of their economies. The bloc is exploring mechanisms for conducting bilateral transactions in local currencies and studying the possibility of creating a common currency. McDonald emphasizes that these initiatives are directly driven by "the loss of confidence in the dollar as a reserve currency." This orientation could redefine the rules of the game for emerging markets.
Discussions about establishing an alternative payment system to U.S.-dominated infrastructures, such as SWIFT, are becoming increasingly frequent among BRICS members. Additionally, the goal would be to reduce vulnerability to unilateral economic sanctions and increase the financial autonomy of member states. This ambition could, in the long term, favor the integration of technologies such as blockchain to secure and automate cross-border flows.
The consolidation of the BRICS bloc occurs at a time when distrust toward U.S. leadership is intensifying. While the process of dedollarization remains complex and gradual, it is nonetheless strategic. In the medium term, this reconfiguration could affect the structure of global reserves, the role of state digital currencies, and the balance of power between traditional and emerging institutions. In this context, cryptocurrencies could also find their place in the developing parallel systems.
Source: Cointribune. (Geopolitics)
by Luc Jose A.
Sun, April 20, 2025.
Econ. Romer A. Carrasco T.