Former U.S. President Donald Trump has returned to the global economic spotlight, threatening to impose an additional 10% tariff on any country “supporting the anti-American policy of the BRICS nations.” This announcement, made as the BRICS summit convened in Rio de Janeiro, has sent shockwaves through the markets and sharpened tensions between Washington and the emerging bloc aiming to challenge U.S. dominance. In the background, concerns are rising about a renewed wave of global protectionism, a shift in the balance of power, and a very real threat to international supply chains.

Background: BRICS as a Challenger to the Old Economic Order

The BRICS group—currently comprised of Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, the UAE, Ethiopia, Indonesia, and Iran—has positioned itself as a geopolitical forum seeking to disrupt the Western-led global order. In recent years, economic, political, and social cooperation among its members has intensified, with a stated goal of “increasing the influence of the Global South” and building economic mechanisms to challenge the dominance of the dollar and Western financial institutions.

At the Rio summit, BRICS leaders emphasized their opposition to U.S. tariffs. In a joint statement, they warned against “unjustified, unilateral protectionist measures,” clearly referencing Trump’s policies, and cautioned that the proliferation of trade restrictions could undermine global growth and exacerbate existing economic inequalities.

Quantitative Analysis: The Scope of Trade and Potential Impact

Trump’s latest announcement stipulates that any country aligning with BRICS policy or adopting “anti-American” positions will face an additional 10% tariff—a significant hike on top of tariffs already announced, which are set to take effect in August. As of 2024, BRICS nations and their potential partners account for over 30% of global GDP and a similar share of world trade. The direct impact of such tariffs could total billions of dollars annually, driving up prices, rerouting trade flows, and incentivizing shifts toward domestic production.

The tariffs, first revealed in April, were originally scheduled to take effect on July 9 but have been delayed to August 1, providing countries a window to negotiate with Washington and potentially avoid escalation. U.S. Treasury Secretary Scott Bessant clarified there will be no further extensions: “This is the time it happens—every country must decide its own path.” This ongoing uncertainty is weighing heavily on America’s trade partners, especially those trying to balance between global blocs.

The BRICS Response and the Risk of Global Escalation

BRICS countries responded swiftly. In their joint declaration, leaders expressed “serious concerns over the rise of unilateral measures inconsistent with WTO rules,” with an unambiguous reference to the U.S. Emphasizing the risk of “trade distortion,” the bloc signaled its readiness to push for new rules in the global trade arena.

The group also extended symbolic support to Iran, a new member, and condemned military strikes against the country, without naming Israel or the U.S. This sent a message of a united front against the West and reinforced intra-BRICS cooperation in energy, technology, and finance.

Trump’s Strategy: Protectionism as a Political and Economic Lever

Politically, Trump is leveraging tariffs as a central pillar of his campaign—pledging to “protect the interests of American industry and agriculture” and penalize those who align with rival power blocs. The explicit threat of an additional 10% tariff on “any country promoting anti-American policy” marks a deep shift from the multilateral approach that once guided U.S. trade and signals a move into an era where economic exchange is conditional on geopolitical loyalty.

How “anti-American policy” is defined remains deliberately vague, raising questions among analysts and foreign governments alike. Steven Olson, a former senior U.S. trade negotiator, suggests the term likely refers to “any initiative challenging America’s economic hegemony,” including moves to reduce dollar usage in international trade or expand the influence of alternative economic institutions.

Global Risks: Are We Headed for a New Trade War?

Trump’s tariff policy has already provoked market reactions. Even before the new tariffs take effect, volatility in equities and commodities has increased as investors reassess global supply chains and exposure to BRICS nations. The main concern is that such sweeping tariffs will trigger retaliation—hardening positions, increasing trade barriers, and possibly leading to “economic bloc” policies in which every country is forced to choose sides.

Western countries like Germany, France, and the UK are also grappling with pressure to choose between closer trade with the U.S. and continued open trade with Asia and BRICS members. The consequences could include a global slowdown, declining exports, upward pressure on inflation and prices, and a widening of poverty gaps worldwide.

Looking Ahead: Where Is the Market Headed?

Analysts and economists increasingly agree that Trump’s tariff policy will face a critical test in the coming months. If measures are intensified, we may see a surge in global tension and a deepening of the “economic split” between blocs. Investors must prepare for scenarios involving trade disruptions, regulatory changes, and perhaps a revival of domestic manufacturing and reduced reliance on globalization.

However, historically, markets have adapted to periods of protectionism—and sometimes such periods spur rapid growth in new sectors, such as domestic technology, renewable energy, and alternative trade mechanisms.