Protectionist policies create ripple effects across global supply chains by increasing production costs and disrupting established trade flows. Historically, tariff wars have contributed to inflationary pressures and slowed economic growth, a pattern observed in various episodes of trade conflict. As an economic bloc, BRICS faces both direct and indirect challenges from these new US policies, which not only affect market access but also alter the strategic calculations of governments and businesses alike.

China, the largest trading partner of the US within BRICS, bears the brunt of these tariffs. With an export-driven economy, higher trade barriers reduce competitiveness, weaken manufacturing output, and slow overall Gross Domestic Product (GDP) growth. The manufacturing sector, which accounts for approximately 27% of China’s GDP, is particularly vulnerable to increased costs and reduced foreign demand.

In response, China may accelerate its diversification strategy by fostering stronger trade relations with the European Union, the Association of South East Asian Nations (ASEAN), and African markets. Moreover, the nation might intensify efforts to de-dollarise its trade transactions, thereby promoting the yuan’s role in global commerce and mitigating the adverse impacts of US tariffs.

India, as an emerging economic powerhouse, confronts its own set of challenges. The potential tariffs on its IT, pharmaceuticals, and textiles export sectors that contribute significantly to its GDP pose a substantial threat. For example, the Indian IT industry accounts for nearly 8% of the nation’s GDP and employs over 4.5 million people, making it highly susceptible to trade restrictions. While India’s trade with the US has grown substantially in recent years, increased tariffs could dampen demand for its services and products. Additionally, the threat to impose sanctions on countries moving away from the dollar may hinder India’s strategic plans to conduct trade in rupees, particularly with nations like Russia and Iran. Nonetheless, India could potentially counteract these setbacks by strengthening intra-BRICS trade partnerships, especially with Russia for energy security and China for manufacturing collaboration thus providing an alternative avenue for economic growth.

Brazil and South Africa, both heavily reliant on commodity exports, are likely to experience market contractions due to lower global demand. Brazil’s agricultural exports, which comprise nearly 40% of its total exports, may suffer from reduced market access and falling commodity prices as global buyers seek more competitive or politically stable sources. Similarly, South Africa, a major exporter of minerals, could witness declining revenues, particularly in the platinum and gold sectors industries that are critical to its economic stability. The heavy dependence on foreign exchange inflows from exports means that any instability can significantly weaken national currencies, thus increasing overall economic vulnerability. To some extent, enhanced trade with China and India, coupled with investments in regional value chains, might partially mitigate these negative effects; however, the overall risk remains high.

Beyond immediate trade flows, the geopolitical dimension of these trade wars extends into the realm of global finance. The US has explicitly warned against attempts to undermine the dollar’s longstanding global dominance. In reaction, the BRICS bloc has actively explored financial alternatives, including discussions on a common reserve currency, de-dollarization initiatives, and an increased use of local currencies in trade. The renewed threat of tariffs could accelerate these initiatives, pushing BRICS nations toward alternative financial mechanisms such as the New Development Bank (NDB) and reinforcing their economic partnerships with countries in the Global South.

The European Union (EU) also faces significant challenges in navigating this evolving trade landscape. With tariffs targeting nations that use value-added tax (VAT) systems, the EU risks being drawn into the protectionist spiral. Economic experts like José Manuel Corrales have advocated for a more diversified trade strategy that includes closer collaboration with BRICS to counterbalance US economic coercion. However, given the historical political and economic alliances with the US, shifting the EU’s trade focus toward BRICS is a complex and politically sensitive endeavour.

A notable trend emerging in response to these trade conflicts is the growing regionalization of supply chains. Nearshoring in North America, enhanced intra-Asia trade, and the formation of emerging African economic blocs indicate a gradual shift from globalization toward more localized economic clusters. For the BRICS nations, this trend presents both opportunities and risks. On one hand, increased self-reliance within the bloc could bolster economic resilience and facilitate deeper integration. On the other hand, exclusion from major global trade networks may pose challenges, particularly if regional clusters fail to fully compensate for the loss of traditional trade relationships.

Historical precedent provides further insight into the potential long-term impacts of these tariff measures. For instance, during the 1930s, the implementation of the Smoot-Hawley Tariff led to a contraction of international trade by an estimated 30%, exacerbating the severity of the Great Depression. More recently, the US-China trade war that began in 2018 saw bilateral trade volumes decline by over 20%, with significant disruptions in global supply chains. These historical examples serve as stark reminders that while short-term measures may be politically expedient, the long-term economic costs of protectionism can be profound.

Looking forward, the current scenario catalyses broader changes in the international economic order. The projected trade volume among BRICS nations is expected to surpass $500 billion by 2030, which underscores the bloc’s potential for self-sufficiency and a rebalanced global trade system. This anticipated growth in intra-BRICS trade reflects not only an economic necessity but also a strategic maneuver to reduce dependence on western-dominated financial structures. As governments and businesses adapt to the uncertainties of protectionist policies, there is a clear impetus to explore new avenues for cooperation that might ultimately lead to a more multipolar economic landscape.

Furthermore, these tariff measures have spurred significant academic and policy debates about the future of globalisation. Scholars emphasise that while protectionist policies may yield short-term benefits for certain domestic industries, they also risk triggering retaliatory measures that could lead to prolonged economic stagnation. Policymakers are thus faced with the dual challenge of safeguarding national interests while ensuring that global supply chains remain robust and efficient. In this context, increased investments in technology, infrastructure, and alternative trade networks become essential components of a comprehensive strategy to counterbalance the adverse effects of tariff-induced disruptions.

In conclusion, the renewed US tariff measures have introduced a new layer of complexity to the global trade environment, significantly impacting the BRICS nations and reshaping the dynamics of international commerce. While the immediate effects may include higher production costs, disrupted supply chains, and economic uncertainty, these challenges also present opportunities for BRICS to consolidate their economic strength through enhanced intra-bloc cooperation and strategic diversification. The potential for a projected $500 billion increase in intra-BRICS trade by 2030 highlights the growing capability of these nations to establish a more self-sufficient and resilient economic bloc. Ultimately, the current wave of protectionism may accelerate the shift toward a more multipolar economic order, reducing the dominance of any single nation in international commerce and paving the way for a more balanced global economic system.

This article is authored by Gunwant Singh, scholar, international relations and security studies, Jawaharlal Nehru University, New Delhi.