India-US Tariff War: BRICS challenges Trump's tariff, know how the credibility of US dollar is in danger?

India-US Tariff War: Recently, US President Donald Trump has imposed tariffs ranging from 10% to 50% on BRICS countries (Brazil, Russia, India, China, South Africa and new members Egypt, Ethiopia, Iran, Saudi Arabia, United Arab Emirates, Indonesia). This step has been taken in response to the BRICS countries' initiative to de-dollarize the dollar and their efforts to challenge the global credibility of the US dollar. Trump's decision can start a new tariff war in global trade, which can affect not only the BRICS countries but also the global economy.

Heavy tariffs on India and Brazil

Trump has imposed the highest tariff of 50% on India and Brazil among the BRICS countries. This action has been taken on India especially because of buying oil from Russia, which Trump has described as a step taken in panic. Through this, Trump has tried to give the message that if the BRICS countries move towards trading in their own currency, then it will become difficult for them to trade in the US market. India, which is a major exporter to the US in sectors such as pharmaceuticals, IT, and textiles, could suffer major losses from this policy.

Putin's proposal and BRICS currency

Russian President Vladimir Putin first proposed that BRICS countries trade in their national currencies (such as rupee, yuan, ruble) instead of the dollar. In 2022, Putin advocated a new international reserve currency, aimed at reducing global dependence on the dollar. Although BRICS has not yet taken any concrete decision on its common currency, Trump has adopted a tariff strategy, considering this possibility a threat. This has increased tensions in global trade, and BRICS countries are preparing to respond to this challenge by uniting.

Trump's fear: Growing influence of BRICS

Trump believes that BRICS was formed to harm US interests and reduce the global dominance of the dollar. The US dollar has been the basis of global trade, oil purchases and sales, and international transactions for decades. About 80% of world trade is in dollars, which provides the US with economic stability and control over global markets. The BRICS countries, especially Russia and China, are taking rapid steps towards reducing dependence on the dollar. After Trump's tariff, India can also become active in this direction, which will be a big blow to the US.

BRICS uniting

The BRICS countries are uniting after Trump's action. The heads of state of these countries can come together on one platform at the SCO summit to be held in China at the end of August 2025. During this, they can formulate a strategy in response to the US tariff. Recently, PM Narendra Modi has held important talks with Russian President Putin and Brazilian President Lula da Silva. Apart from this, Putin and Jinping, Lula and Putin, as well as South African President Cyril Ramaphosa have also held talks with many leaders. This shows that the BRICS countries are now uniting to challenge the dollar.

Potential setback for the US

If the BRICS countries start trading in their own currencies, it will be a big setback for the US economy. The reduction in demand for the dollar could weaken the US' ability to borrow at low interest and its control over global markets. The growing influence of BRICS countries and the move towards trading in their national currencies could weaken the global position of the US dollar.

Trump's tariff policy

Trump has warned BRICS countries that if they create a new common currency or challenge the dollar, they could be subjected to tariffs of up to 100%. This policy is part of his 'America First' strategy, which aims to boost US industries and reduce the trade deficit. However, the move could harm global trade and create challenges for countries like India. Indian exports, especially in the pharmaceuticals, IT, and textile sectors, could become uncompetitive in the US market.

India's diplomatic challenge

India is a founding member of BRICS as well as an important trading partner of the US. Trump's 50% tariff will hurt Indian exporters as it will increase the cost of products. India has taken a cautious approach to de-dollarization. External Affairs Minister S. Jaishankar and Reserve Bank Governor Shaktikanta Das have made it clear that India's aim is not to weaken the dollar. India faces the challenge of maintaining a diplomatic balance between the US, China, and Russia.