Pressures and Promises: the US Struggle to Contain a Rising BRICS

The US tightens pressure on BRICS, especially India, as dedollarization accelerates and the 2025 Rio summit looms, reshaping global trade, finance, and power balances.

In the evolving dynamics of global power, the economic landscape traditionally led by the US dollar is experiencing a notable transformation. This change is largely driven by the growing influence of BRICS nations (Brazil, Russia, India, China, and South Africa. The list has recently been expanded to include Indonesia, Egypt, Ethiopia, Iran, Saudi Arabia, the United Arab Emirates, and eight additional "partners". It is always beneficial to report this information accurately.)

As BRICS+ becomes more proactive in influencing global economic policies, the United States is implementing a dual approach of applying pressure and offering incentives to counteract this group's rising influence.

A key element of this strategy involves India, which plays a crucial role in both Western and BRICS-aligned platforms. As attention turns to the significant 2025 BRICS summit in Rio de Janeiro, tensions are mounting. The US is employing a "carrot and stick" tactic to sustain its geopolitical influence amidst an accelerating movement towards de-dollarization.

Strategic Disengagement: The Decline of the Dollar

A quiet, determined exodus from the US dollar is reshaping the global economic order. Long the cornerstone of international trade and reserves, the dollar is now facing widespread skepticism, particularly among Asian economies and the BRICS bloc. This de-dollarization movement reflects both geopolitical mistrust and concerns over America's mounting fiscal liabilities—its debt now surpassing $36 trillion.

China, the most economically influential member of BRICS, is leading the retreat. In 2024 alone, Beijing offloaded $150 billion in US Treasury securities, substituting them with gold and other tangible assets. This strategy is gaining traction across emerging markets, with over $7.5 trillion in Asian reserves still potentially exposed to dollar-based risk—a figure that, if reallocated, could pose a seismic threat to US economic stability.

Underlying this shift is the erosion of faith in Washington's financial stewardship. Many foreign policymakers now view the dollar as increasingly vulnerable to inflationary pressures and geopolitical manipulation. The legacy model—export to the US, then recycle earnings into American debt—is fraying. Instead, nations are pursuing more sovereign approaches, like the use of local currencies in trade.

Statistics back this shift: China’s trade with BRICS countries hit 4.62 trillion RMB ($650 billion) in the first nine months of 2024, a 5.1% year-over-year increase. Crucially, 54.3% of this trade was conducted in RMB, while only 41.4% relied on the dollar. The implications are profound. As Virginie Maisonneuve of Allianz Global Investors aptly put it, “We are experiencing a change in the world order, and I don't think we will return to the way things were before.”

The Stick: Pressure, Sanctions, and Tariffs

From Washington’s viewpoint, the cohesion and assertiveness of the BRICS bloc represents an existential challenge to the post-WWII dollar-centric order. This sense of urgency is evident in recent rhetoric and actions. The US has begun issuing stark warnings, particularly to India, a country seen as teetering between East and West.

During the 2025 US-India Strategic Partnership Forum in Washington, US Commerce Secretary Howard Lutnick issued pointed criticisms of India’s continued defense purchases from Russia and its deepening role within BRICS. According to Lutnick, India’s alignment with a bloc seeking to erode dollar dominance "gets under America’s skin" and could jeopardize future bilateral relations. The message was clear: align with the West, or face consequences.

This posture extends beyond rhetoric. Under both the Biden and Trump administrations, the US has wielded tariffs as punitive tools. Trump’s recent threat to impose 100% tariffs on BRICS nations launching a new non-dollar currency illustrates the aggressive line being drawn. Brazilian President Lula, unphased, responded that these threats "do not scare anyone" and reaffirmed BRICS' autonomy in setting their own agenda.

Ironically, this protectionism may accelerate the very shifts Washington seeks to deter. As US trade walls rise, nations are increasingly turning to China as a commercial alternative. More trade with Beijing means more transactions in RMB, reinforcing dedollarization and weakening America's financial influence.

The Carrot: Dialogue, Trade Deals, and Economic Engagement

Despite the hardline approach, the US is also deploying diplomatic incentives, especially with India. Even after criticizing India’s military and economic ties to Russia, Secretary Lutnick softened his stance, suggesting progress was being made and that both governments were working through their differences.

Discussions of a potential US-India free trade agreement have gained momentum, with Washington offering preferential access and technology cooperation as sweeteners. For New Delhi, this presents a delicate balancing act: maintain strategic autonomy while capitalizing on trade opportunities from both East and West.

A similar duality plays out in US-China relations. While tensions persist, channels of communication remain open. A social media post by US Ambassador to China David Perdu, showing a meeting with Chinese Foreign Minister Wang Yi, was widely interpreted as a signal that dialogue remains possible—even if substantial progress remains elusive. Analysts suggest that the US sees strategic dialogue with China as “mission critical” to bolstering the dollar and preventing further economic decoupling.

The Road to Rio: What BRICS 2025 Could Bring

As Brazil prepares to host the 2025 BRICS summit in Rio de Janeiro, the stakes have never been higher. The agenda, while not yet finalized, is expected to showcase the bloc's most ambitious initiatives to date. Chief among them is the presentation of a unified climate finance policy, the establishment of a grain exchange to circumvent Western pricing benchmarks, and increased digital and technological cooperation.

India, notably, has taken a leadership role in pushing forward its digital public infrastructure model, including Aadhaar and UPI, which now accounts for nearly half of global digital transactions. These efforts underscore India’s relevance and the complex interplay between its Western partnerships and Eastern affiliations.

China and Russia are also deepening cooperation across high-tech sectors, including AI, biotechnology, and renewable energy. This push for technological self-reliance is a direct response to Western sanctions and export controls, further incentivizing the development of a parallel global system.

The Broader Implications

The rise of BRICS+ and the steady move away from dollar-centric commerce could usher in a new era of multipolarity in international relations. For global trade, this means more bilateral agreements in local currencies, the emergence of new reserve assets, and potentially more volatility as long-standing systems adjust to new realities.

For the US, the implications are stark. Losing its status as the world’s default reserve currency would make debt financing significantly more difficult and costly. Foreign demand for Treasury bonds could dwindle, forcing higher interest rates and reducing Washington’s ability to fund its global military and diplomatic endeavors.

Still, the dollar’s dominance isn’t disappearing overnight. The transition is slow and fragmented. But as one analyst recently noted, "The page of the dollar-based monetary system has not yet turned—but the first lines of its epilogue may already be written."

A Multipolar Future

The interplay between US pressure and BRICS resistance is shaping a new global order. As the world watches the lead-up to the BRICS 2025 summit in Rio, the dynamics between Washington and New Delhi, Beijing, and beyond will be critical. Whether the US can adapt to a world where its financial supremacy is contested, and whether BRICS can truly offer a sustainable alternative, remain open questions.

What is certain, however, is that the global economy is moving into uncharted territory—one marked by decentralized power, diversified currencies, and reimagined alliances. In this emerging world, the ability to navigate complexity will determine not just prosperity, but sovereignty.