BRICS, Brazil, and the Dollar

https://www.agweb.com/markets/pro-farmer-analysis/brics-nations-accelerate-shift-away-u-s-dollar-global-trade

https://trt.global/world/article/b73a9e89ed67 

The lead-up to the July 2025 BRICS summit in Rio de Janeiro was the source of a great deal of hype and speculation. Would the BRICS bloc make a more aggressive move against the dollar?

For all the 'buzz' it received it turned out to be rather anti-climactic as major leaders such as Xi and Putin didn't even show up - signalling no major announcements would be made.

And yet de-dollarization is real. It is happening but more could be done. A lot of analysts and commentators thought this might be the moment. In other cases I wonder if it wasn't just hype being promoted by those with interests in the gold and crypto-currency markets? A campaign of fear is in their interest and yet it also seems clear they are ignoring the threat of a bubble.

Some point to Trump's threatened tariffs as having slowed down the BRICS agenda, and yet his aggression has actually pushed Brasilia to accelerate de-dollarization. Lula has been quite vocal in supporting the notion. And why not? Trump is clearly attempting to meddle in Brazil's politics and is seeking to aid Jair Bolsonaro - Lula's greatest domestic enemy.

BRICS will continue to push in this direction but the leaders of the bloc don't want to push too hard too soon and create a crisis. They want BRICS to last. At present the dollar is still too dominant but that may change in the next few years. Though none of the BRICS members is openly saying it - it can probably be assumed that the members don't want to simply shift from US dependence to a total reliance on Beijing either. There are some internal tensions within BRICS.

The TRT article is helpful in raising the issue of the UN Security Council (UNSC) which is proposing to make India and Brazil permanent members. This would give them veto power and thus (in some respects) it would weaken the power and flexibility wielded by other members. The US and the UK would be the most likely to feel this and become agitated by it. China has also opposed India but the two nations are working to smooth over their differences. As members of both BRICS and the SCO, they need to get along for those blocs to make any sense and have any real value.

At one time it looked like India would land firmly in the American camp, but Washington has repeatedly alienated New Delhi and at this point (and especially in light of Trump), India seems ready to shift away from Washington's orbit. Modi does not seek to make America an enemy or to return to the period of Indian-American tension during the 1960's-1980's, but he's realised the Americans are not reliable and given to scheming and manipulative sudden reversals. He wants to do business but he's not going to hitch himself to Washington's wagon. He will continue to pursue BRICS policies which challenge American economic hegemony, the SCO which seeks to counter US geo-strategy in Eurasia, and to the great consternation of Washington, he will continue to purchase Russian weapons and buy their oil.

Watching from the sidelines is the EU. While Europe is dominated by NATO and Atlanticist commitments, these have been placed on shaky ground and though Washington is an ally and partner - the EU is also something of a rival. There's a dynamic at work which (by definition) is always changing. The masters of the Euro wouldn't mind if the dollar was downgraded as it would create a space for them in terms of the global currency exchange. And yet the Eurozone is beset by squabbles over investment and debt as the wealthier nations are reticent to bear a greater burden.

China for it's part is attempting to push through internal regulatory and market reforms that will make international investment more attractive - investment based on the yuan currency. The goal is to present China as a beacon of stability as opposed to the erratic policies emanating from Washington (and thus Wall Street) and its increased credit risks due to it expanding debt - which Trump's bill is set to increase. This is but another step toward the breaking of the dollar.

These economic factors when coupled with geopolitical realities demonstrate the world is moving in a multi-polar direction and Trump (despite his bluster to the contrary) is accelerating the process. The question is will a war break out first, or will the world stumble through this transitional period? Either way the multi-polar reality will signal not only a loss of American prestige and power, but a great economic loss as well. Those who are sounding the alarm about de-dollarization are not entirely off base, but their timelines and their use of fear demonstrate either a lack of understanding or more likely an underhanded attempt to push investors in directions that will benefit them.

At present it is uncertain as to whether or not the US Congress will 'flip' in November 2026. If it does, then Trump is going to start facing some domestic political resistance - though it must be said the Democrats are weak and corrupt and seem limited both in terms of will and imagination. Trump has just over a year to push through some of the more aggressive points on his agenda. Obviously if the GOP retains control, it will buy him more time. It's clear he wants to break BRICS, but this isn't the 1990's - it's the 2020's and the US due to its own miscalculations and blunders has weakened its own hand.