There are few things more revealing in geopolitics than a superpower telling the rest of the world what it must not do. When US President Donald Trump threatened 100 per cent tariffs on BRICS countries that pursued a currency or mechanism designed to challenge the US dollar, he was being unusually explicit about what Washington fears. The temptation is to dismiss the threat, made in November 2024, as just another Trumpian outburst. But that would miss today’s larger story.
The larger story is that BRICS is beginning to challenge some of the structural advantages the US has enjoyed for decades—and Trump is being unusually blunt in defending them. The BRICS grouping does not have to become an anti-American bloc to cause discomfort in Washington. It merely has to become good enough at providing alternatives for countries such as India, China, Russia and the Gulf states to have more room to conduct trade, payments and investment without passing through systems dominated by the West.
That is a much bigger challenge than a new currency.
The Dollar
The dollar is not merely America’s currency. It is part of the infrastructure of global commerce: trade settlements, currency reserves, banking, capital markets and international payments. Its dominance gives Washington influence that goes well beyond the size of the American economy. That is why the prospect of de-dollarization, even gradual and partial, makes Washington nervous.
And BRICS is no longer talking in the abstract. The New Delhi Declaration backed greater use of national currencies, faster and cheaper cross-border payments and greater interoperability between national payment and messaging systems. The New Development Bank is also being encouraged to expand local-currency financing.
None of this is about replacing the dollar tomorrow morning. Nor is a common BRICS currency anywhere near reality. And that is not the point. Financial dominance is not lost in one dramatic event. It can be diluted, transaction by transaction.
More choices
This is where the Delhi summit becomes more significant than the rhetoric around it. India’s UPI, Brazil’s Pix and other national payment systems demonstrate that countries do not necessarily need to build one giant alternative to the existing financial system. They can instead build links between their own systems and gradually reduce the number of transactions that require Western intermediaries.
That is less spectacular than announcing a new global currency. It may also be more practical.
Thus, for the United States, the problem is not simply that BRICS might become stronger. It is that individual countries might become less dependent on the US. After all, American power has always rested partly on being indispensable. The more alternatives countries have in payments, finance, energy, technology and trade, the less indispensable any one power becomes.
That is also why BRICS now matters more geopolitically. A coordinated Global South would have greater bargaining power with both Washington and Beijing. It need not become an anti-American bloc. It only needs to stop behaving like a collection of countries that have no alternative to American systems.
The paradox
There is an intriguing contradiction here. The US wants to preserve the dollar’s extraordinary international position while also pursuing policies aimed at making American industry and exports more competitive. Trump has been particularly vocal about trade imbalances and the competitiveness of American industry.
Yet the dollar’s international strength is itself an American advantage. The world wants dollars because the United States provides the financial depth, liquidity and institutional credibility that make them useful. This is the privilege Washington wants to preserve.
BRICS, meanwhile, is not necessarily trying to destroy it. At Delhi, the emphasis was on making existing alternatives more workable: local currencies, payment interoperability, development finance and greater economic cooperation. That distinction is significant.
The 'real fear'
The United States may, therefore, be fighting the wrong battle if it sees BRICS as just another attempt to dethrone the dollar. The deeper challenge is a world in which countries have more choices. More importantly, they are openly looking for and discussing alternatives. India can work with the US and the Quad while engaging China and Russia. Gulf countries can deepen their Western partnerships while expanding ties with China and other BRICS members. Emerging economies can seek reform of institutions created largely in the post-war Western image while continuing to participate in them.
That is the world India is helping to build. And it is precisely why New Delhi’s BRICS diplomacy matters. The irony is that Washington’s pressure may actually strengthen the argument for alternatives. The more loudly America warns countries not to reduce their dependence on the dollar, the more attractive reducing that dependence can become.
BRICS does not have to defeat America. It only has to make America less indispensable. And for a country accustomed to being indispensable, that may be the real threat.
Views expressed are personal