Trump, Tariffs, BRICS and ASEAN: Much Ado About What?

Authors: William J. Jones, Asia Brand*, Pattarakorn Songwarat**

Since taking office again, President Donald Trump has been busy reshuffling relationships with American partners. The latest and most dramatic were his ‘liberation day’ tariffs, which looked set to undermine decades of trade relationships. He has also been commenting prolifically about BRICS and the ‘threat’ that BRICS represents to American global power and dominance. This brief analysis will consider Trump’s tariffs against the backdrop of BRICS expansion and anti-China American foreign policy.

Trump Tariffs and ASEAN States

Trump’s ‘liberation day’ tariffs announced on April 2^nd targeted ASEAN states disproportionately, with many ASEAN states having extremely high rates. The notion of reciprocity is spurious, to say the least, as Trump justified its Cambodian and Thai tariffs of 49% and 36% stemming from their tariffs of 97% and 72%. These tariffs were put on hold for 90 days, with new rates announced July 9. President Trump declared another pause for negotiations until August 1.

During the 90-day pause of tariff implementation from April 2 to July 8, it became known that a major non-negotiable clause on the American side was not allowing 3rd-country trade diversion. This is clearly targeting the reexport of Chinese products, or largely Chinese value-based manufactured goods, from importation into the American market. This stems from the practice of Chinese manufacturers and Southeast Asian states in the wake of Trump’s first-term China tariffs. When tariffs were imposed on Chinese manufacturers in 2018, they simply shifted manufacturing to Vietnam, Thailand, and Malaysia.

The BRICS Challenge

The BRICS 2024 Kazan summit was notable in that it brought BRICS expansion, including Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates. Aside from expansion, the Kazan Summit also saw Malaysia and Thailand added as observing partner countries along with half a dozen others. Vietnam joined as an observer at the recent 2025 Rio BRICS Summit.

BRICS is threatening to Trump not because of what it is, but because of what it could become. BRICS country members are full of resources, now owning 43.1% of oil production and 44% of oil reserves, which can challenge the power USD holds in international trade. Not only that, but over 70% of the production of minerals like platinum and palladium and reserves for zinc and rare earth minerals are from BRICS+ members. By virtue of China, BRICS also includes over 70% of rare earth mineral production, including derivative manufacturers from rare earths.

These minerals act as currency in global trade.

A major initiative of the Russian BRICS presidency was the BRICS Bridge initiative to settle interbank payments, thereby bypassing the US dollar and global payments system of SWIFT. While this system is still in exploratory stages, many BRICS members settle trade in local currencies and via currency swap agreements. This is inefficient and does not cover the full potential of multilateral BRICS trade. However, China’s alternative of CIPS, Cross Border Interbank Payment System, is a viable alternative that can be the backbone of a BRICS-based system. Ironically, on April 16, 2025, CIPS processed more monetary volume than SWIFT for the first time in history.

This is BRICS greatest threat to American hegemony, America’s continuing financial stranglehold on the world via dollar-based payments. The sheer size and volume of China-centric trade, coupled with the manufacturing and supply chain integration of Southeast Asian states, the energy powerhouses of the Mideast, and the resource abundance of Russia, will pose a substantial alternative threat to American and European global power.

Trump has intimated that BRICS is a threat to the US dollar-based trading and finance system and will retaliate against any and all challenges, threatening additional tariffs on BRICS members. This message was received clearly by Cambodia which had been mulling BRICS observer status, now backing away and counting itself lucky to only have tariffs raised from 0% to 36%.

With the sanctioning of Russia, cutting it out of SWIFT and the theft of its central bank reserves ensure that Russia will never come back into the Western financial sphere. Iran’s rapprochement with Saudi Arabia, coupled with illegal armed attacks from Israel and the United States, ensures that Iran will be permanently outside of the Western sphere. Increasing pressure on China directly and indirectly through tariff threats to decouple from China is pushing countries to choose.

Conclusion

The choice for the world is quite clear. Choose America, which will engage in unilateral strong-arm tariff threats against your country, possibly use coercive financial sanctions if Washington disagrees with your foreign policy, possibly steal your country and people’s assets, interfere in your external trade relations; and only offer high-tariff access to the American market, poach your domestic industry, offer to sell expensive weapons, and access to an anachronistic SWIFT system that takes days to process payments.

Choose China, which will allow for infrastructure development through the BRI, future loans through the BRICS New Development Bank, seamless and immediate payments across borders, respect for sovereignty while being treated as a partner, and opportunities for expanded trade in large pacts such as RCEP and the future China-Japan-South Korea-led trade pact. This is not to say China has only benefits to offer. Trade with China largely demonstrates trade deficits but also access to future high tech and local manufacturing of Chinese IP such as EV’s in Thailand and nickel in Indonesia.

The United States has not had a grand strategy for trade and prosperity since Obama’s Trans-Pacific Partnership. Instead, American foreign policy engagement is unidimensional, based on security and increasingly the use of threats and force. The United States has largely walked away from multilateral rules-based organizations and is increasingly engaging in unilateral action unmoored from international law. It is not clear, aside from access to a rich market, what the United States has on offer. This will only fuel BRICS expansion, development, and integration.

*Asia Brand is an undergraduate student studying International Relations and Global Affairs with an interest in Southeast Asian affairs.

**Pattarakorn Songwarat is an undergraduate studying International Relations and Global Affairs with an interest in Asian affairs.