Exclusive | Lord O’Neill, who coined ‘BRIC,’ calls bloc’s dedollarisation bid ‘unrealistic’

New Delhi: Donald Trump’s return to the White House has reignited fears of a tariff war, with major implications for BRICS nations. His protectionist stance—warning that countries seeking to challenge the dominance of the US dollar could face tariffs as high as 100 per cent—may either push the bloc closer together or expose its internal divides. So, with BRICS expanding to include Saudi Arabia, Iran, Egypt, Ethiopia, Indonesia, and the UAE, its ambitions of de-dollarisation and reshaping global trade are being tested.

To assess the seriousness of Trump’s tariff threats, the feasibility of a BRICS currency, and whether internal rivalries could limit the alliance’s ambitions, Hindustan Times spoke with Lord Jim O’Neill—the British economist who coined the term BRIC, formerly chaired Goldman Sachs Asset Management, and served as Commercial Secretary to the Treasury in the Second David Cameron Ministry (2015–2016).

Edited excerpts:

Q. Do you think Trump’s 100% tariff threat will deter BRICS nations from exploring alternatives to the US dollar, or could it push them further toward de-dollarisation, especially since both Kremlin and India denied such a strategy right after the threat?

“To be honest, of all the things Trump has said, this one left me both amused and confused. If you look at his other statements about BRICS, it’s not entirely clear if he even knows which countries are part of it. There’s a clip circulating where he mentions Spain as a BRICS member, which is just baffling!

“As for the specific threat, I doubt he seriously intends to target India in the way it suggests. But on the broader question of BRICS creating an alternative to the dollar, I don’t see it as a realistic idea. Every time it’s brought up—usually by the Brazilians or Russians—it just doesn’t make sense. For such a move, countries would have to give up their domestic monetary policies and the independence of their central banks. Can you imagine India agreeing to that? I suppose it could happen someday, but certainly not in my lifetime.”

Q. You coined the term BRIC in 2001. In your view, is the idea of a BRICS currency realistic, or is it just political rhetoric?

“I think it’s mostly rhetoric. When I look at the BRICS political club that emerged in 2009, I often tease its leaders and advisors. The peak of the group’s economic performance actually coincided with its creation, but since then, BRICS as a whole hasn’t performed nearly as well, especially Brazil, Russia, and South Africa, which have struggled significantly.

“While the political club hasn’t achieved much tangible progress, it’s been successful in symbolising how underrepresented emerging economies are in global institutions like the World Bank, International Monetary Fund (IMF), and United Nations (UN).

“They’re right to highlight the dominance of the US dollar and its outsized influence on the global financial system compared to the US economy’s relative size. However, unless major BRICS nations—particularly China and India—seriously cooperate on global economic initiatives and develop their own financial systems, a real alternative to the dollar isn’t likely.

“We’ve seen this before—people thought the Yen in the ’80s or the Euro would challenge the dollar, but neither gained enough traction due to structural challenges. So, while the rhetoric is symbolically powerful (and Trump’s comments show its influence), I don’t see it translating into reality anytime soon. That said, if India and China were to foster a positive, cooperative relationship and pursue genuine free trade and big global initiatives, things could change. But without that, de-dollarisation talk remains just talk.”

Q. Despite BRICS efforts, studies show the US dollar remains the world’s dominant reserve currency. What key challenges prevent BRICS nations from reducing reliance on the dollar?

“I’m glad we’re discussing this, though it might seem contradictory. Looking at history, especially as someone from the UK, it’s clear that the world’s largest economies eventually lose their currency dominance. When the UK was the largest economy, with its vast empire and global influence, the Pound was the most important currency. Even after the US surpassed the UK economically, the Pound remained dominant for a while—until, unsurprisingly, the dollar took over and has remained on top ever since.

“If some BRICS countries eventually surpass the US in economic size, it’s likely we’ll see a shift in the global monetary system. But this depends on whether China and India can sustain their economic ambitions. Both countries, despite short-term challenges, are broadly on track with the growth projections outlined in the original BRICS estimates. However, achieving a global alternative to the dollar isn’t easy. Take the Euro, for instance—it had the potential to rival the dollar but fell short because European policymakers didn’t establish a unified Euro-denominated bond market.

“This brings us to the core issue with BRICS. While the bloc often makes symbolic statements, it lacks substance in pursuing collaborative economic policies. For example, if BRICS were serious about creating a shared currency, the first step would be genuine free trade among member countries. But as we know, China and India—despite sharing a border—are far from achieving that goal, and it doesn’t even seem to be a priority for either nation. Without such cooperation, the idea of a BRICS currency remains more rhetoric than reality.”

Q. BRICS has expanded, now including countries like Egypt, Iran, Ethiopia, Indonesia, Saudi Arabia and the UAE. Do you see this expansion making the bloc stronger, or could internal divisions weaken its influence?

“I lean toward the latter. Since I’m often asked about BRICS, I was aware—about 18 months before the first expansion—that Russia and China were pushing for it. In my view, there’s no clear logic behind the countries they’ve chosen.

“What are the criteria? Is it population size, economic strength, or stage of development? Or is it just about bringing in developing nations that find it convenient to join this symbolic club? Looking at the current members—now nine or ten, depending on Saudi Arabia’s status—some choices seem odd. Ethiopia and Egypt aren’t exactly friendly neighbours. Why them and not Nigeria, which has nearly 20% of Africa’s population and huge economic potential?

“It all seems more symbolic than strategic. And if Saudi Arabia fully joins, how does that work when Saudi Arabia and Iran have been regional rivals for decades? It’s hard to see how BRICS can truly function as a bloc with common goals.”

Q. What about Canada, Mexico, and the Eurozone? Could Trump’s proposed tariffs on these allies backfire, pushing them toward alternative trade partnerships? Or would they respond with counter-tariffs to challenge US dominance—potentially escalating into an all-out trade war?

“I think Trump is taking the US down a very dangerous path. Let’s look at it through the lens of his slogan, “Make America Great Again”. What exactly isn’t great about America?

“The US economy is set to hit nearly $30 trillion in GDP by the end of this year, with a per capita income close to $90,000—unmatched by any other large country. It’s almost six times the size of Japan or Germany, and even with China’s rapid growth, its economy will still be only about two-thirds to three-quarters the size of the US.

“America’s economic dominance is already undeniable. It now accounts for 50 per cent of the G7’s total GDP. So, while “MAGA” is politically powerful, it’s not rooted in economic logic. If the goal were more inclusive growth—something closer to Scandinavian models or South Korea—it would make sense. But using tariffs both to dominate the world and to retreat from it is built on shaky foundations.

“If Trump continues using trade tariffs as a weapon to pressure other countries and boost US trade, it will backfire and weaken America’s economic future. The reality is that the US runs trade deficits because it saves too little relative to its needs, relying on foreign capital. To fix its trade balance, it would need higher savings or lower domestic spending—something at odds with Trump’s promise of rising real incomes.

“And markets are already reacting. Just four weeks into his leadership, US markets have underperformed compared to the rest of the world—something we haven’t seen in a long time. This contradicts the bullish outlook many still hold on the US economy.

“If Trump aggressively pursues tariffs, he could push other countries into new alliances—especially China and India. I’ve long argued that China should invite India to co-design its Belt and Road Initiative (BRI). If those two economic giants worked together, they could reshape global trade and make US tariffs irrelevant. In that scenario, the rest of the world could simply shrug and let America isolate itself.”

Q. With China positioning itself as the champion of a multipolar world and India leveraging its non-aligned legacy, who holds the upper hand in leading the Global South, and can BRICS sustain this rivalry without imploding?

“That’s a great question, and I have to say, whether by luck or skill, India has navigated the past decade remarkably well!

“What’s fascinating—especially with Trump back in the picture—is India’s unique position. It’s the fastest-growing BRICS nation and has deep historical ties with Russia and South Africa. At the same time, it’s the only BRICS member that every G7 country, including the US, actively wants closer ties with.

“You certainly can’t say that about China, given the current push to reduce reliance on it—a move I think is a mistake for the G7. So, in this increasingly polarised world, India is playing its cards wisely.”