Amin Rezaei-Nejad – International Affairs Expert

Trump has repeatedly threatened to impose additional tariffs on BRICS members, openly fearing the weakening of the dollar as the pillar of global economic leadership. The heart of America’s global power in recent decades has pulsed not only due to its military strength but also its unchallenged dollar dominance. Any meaningful effort to reduce reliance on the dollar is directly interpreted as undermining one of the key pillars of its superpower status.

Reducing dependence on the dollar in global trade and foreign exchange reserves will have profound and multifaceted consequences for the United States. The most significant impact would be the loss of the “exorbitant privilege” that allows the U.S. to finance trade and budget deficits by printing dollars without facing severe short-term inflation. A decline in global demand for the dollar would increase the government’s borrowing costs and limit its fiscal flexibility. Politically, the critical leverage of U.S. financial sanctions—which heavily relies on dollar dominance and associated financial systems like SWIFT—would lose much of its effectiveness. This would erode Washington’s ability to exert unilateral pressure and weaken its geopolitical influence overall.

To counter dollar dominance, BRICS employs a range of key tools and mechanisms. First, promoting bilateral trade in local currencies (such as China-Russia or China-Brazil agreements) eliminates the need for dollars in transactions. Second, expanding currency swaps between central banks to facilitate dollar-free exchanges and enhance the liquidity of national currencies. Third, strengthening alternative payment systems like Russia’s SPFS and China’s CIPS to bypass the SWIFT network. Fourth, increasing the share of gold in reserves as an asset independent of the dollar. Fifth, ambitious ideas include creating a common digital currency or a blockchain-based joint settlement mechanism, as well as developing independent financial institutions like the New Development Bank (NDB) to finance projects and issue bonds in local currencies outside the dollar-dominated system.

However, internal BRICS challenges—particularly conflicting interests and geopolitical rivalries among members like China and India—pose significant obstacles to achieving these goals cohesively. Border disputes, competition for influence, and India’s concerns about China’s dominance could slow decision-making or lead to minimal compromises. While China seeks to turn BRICS into an anti-Western lever, India and others prefer a more balanced approach to avoid damaging relations with the West. The coalition’s success depends on managing these differences and finding practical common ground beyond anti-American rhetoric.

The inclusion of key oil-rich nations like Saudi Arabia, the UAE, and Iran in BRICS has the potential to transform global energy markets and geopolitics. With nearly 47% of the world’s oil production, the coalition now has unprecedented leverage to influence market rules. Selling oil in non-dollar currencies could deal a historic blow to the dollar’s role as the energy benchmark. Greater coordination among BRICS producers could also impact pricing and energy flows, reshaping the balance of power in the Persian Gulf and beyond.

Trump’s vehement opposition to a U.S. central bank digital currency (CBDC) is directly linked to fears of the dollar weakening. He views CBDCs not only as a threat to financial freedoms and a tool for greater government control but also deeply worries that U.S. delays in developing this technology will allow rivals—especially China and potential BRICS initiatives—to set new standards in digital payments and reduce the dollar’s share. If BRICS succeeds in creating a common currency or an independent, efficient financial network, the U.S. and its Western allies will likely respond aggressively, possibly with broader sanctions, increased diplomatic pressure, financial restrictions, and higher trade tariffs against involved countries and entities.

The West will use all its leverage to maintain the status quo, though the economic size, vast populations, and energy resource power of BRICS members will make these measures less effective than in the past.

Ultimately, while BRICS still faces internal challenges in cohesion and project implementation, its expansion signals the gradual decline of the U.S.-led unipolar order. The coalition’s success hinges on managing member disputes and delivering practical solutions to reduce dollar dependence. Even without becoming a fully unified bloc, BRICS has emerged as a key player in the transition toward a multipolar order that will shape the future global system.