【By Observer Net Columnist Juliane Furno, Marco Fernandes】
"The voice of the Global South must be heard."
At this week's United Nations General Debate, Brazilian President Lula made a firm statement to the audience. Lula also mentioned that some countries have taken unilateral actions, pushing the global economy into crises such as high prices and stagflation.
A few meters away, US President Trump was sitting below, wondering what his reaction would be to Lula's words?
US President Trump speaking at the United Nations. Photo from the UN official website
Before this conference, the US and Brazil were in a standoff over tariff issues and the sentencing of former President Bolsonaro.
Brazil has long maintained a trade deficit with the US, importing far more goods and services from the US than it exports. According to the Office of the US Trade Representative, in 2024, the US exported about $49.7 billion worth of goods to Brazil, while importing about $42.3 billion worth of goods from Brazil, resulting in a $7.4 billion surplus for the US.
The US-Brazil trade relationship contrasts sharply with the China-US trade. In 2024, China had a trade surplus of about $300 billion with the US, exporting far more than it imported. If we use Trump's peculiar tax standard on "Liberation Day" — directly considering the US import volume as a trade deficit — Brazil should actually enjoy negative tariffs. According to this logic, the Brazilian government should instead impose an 8% tariff on US products.
The slogan "Make America Great Again" stems from the deindustrialization process where American manufacturing moved to East Asia. According to this theory, taxing East Asian products should promote the return of manufacturing to the US.
But the problem is: Brazil's exports to the US mainly consist of primary products and low-complexity industrial goods. This means that tariff measures lack economic rationality. In fact, as Brazilian products become more expensive, American consumers have already felt the rise in food prices such as beef — the increase has been particularly significant in recent weeks.
Therefore, Trump even suspended tariffs on about 700 items, including orange juice, pulp, fertilizers, aircraft and their components (from Embraer), and metallurgical intermediates, which still maintain the previous 10% tariffs. With the exemption list published on August 6, the Brazilian government estimates that only about 36% of its exports to the US will be affected by a 50% tariff.
However, it is clear that Trump is using tariffs as a political weapon to attack Brazilian sovereignty, with the target being the 2026 presidential election. Washington also used the Global Magnitsky Act — a law that allows sanctions against individuals involved in drug trafficking and terrorism worldwide — to punish some judges of the Brazilian Supreme Court.
The US president clearly outlined the main reason for attacking Brazil: demanding Lula to halt the trial of former President Bolsonaro (accused of organizing a coup attempt to overthrow the newly elected Lula government in January 2023). This seems to place presidential power above the Supreme Court.
Trump also accused the Brazilian Supreme Court of "infringing" on the "free speech" of US companies and individuals — in fact, the Brazilian judicial system is legally regulating social media platforms in criminal cases. These two matters are being handled by Justice Alexandre de Moraes. There are also rumors that Trump aims to target the BRICS main countries to weaken the organization and eye Brazil's second-largest global rare earth reserves. These attacks may be intended to force the Brazilian government to open negotiations on undisclosed issues.
On September 22, the US imposed sanctions on the wife of Brazilian Supreme Court Justice Alexandre de Moraes (above) and revoked visas for several Brazilian judicial officials and government officials. This is the latest measure taken by the Trump administration after former President Bolsonaro was sentenced.
However, the escalation of US aggression towards Brazil and many other countries is not solely based on President Trump's subjective assumptions. To attribute this commercial offensive characterized by comprehensive sanctions, blockades, and tariffs entirely to the Republican term is one-sided. The US is experiencing a global hegemony crisis, struggling to cope with increasingly intense competition in the international system. Although Trump's strategy differs from that of neoconservatives (both Democrats and Republicans), it serves the same strategy.
"Rivals" growing stronger sounds the alarm, and the US is taking action
We should note: According to the rules established by the US after World War II, China is continuously rising in the economic, technological, and even monetary fields, and is seen by the US as a "threat" to its hegemony. In other words, the US being surpassed or at least forced to share global leadership is just a matter of time. Therefore, the US believes it must overturn the existing order and rebuild a new system that no longer relies on free trade and is supported by 900 global military bases.
Currently, the European economy is stagnant, and the US economy is also growing slowly. In 2024, the US grew by 2.8%, the UK and France each by 1.1%, and Germany's GDP shrank to 0.2%. In contrast, the BRICS countries are leading global growth: India grew by 7%, Indonesia and China by 5%, Russia by 4.3%, and Brazil achieved 3.4% growth.
"Rivals" growing stronger sounds the alarm, prompting the US to expand its trade sanction system from capitalist peripheral countries to major powers like China and Russia, trying to stifle any possible rise of Eurasian powers. Moscow has been under severe sanctions since at least 2014 — when Crimea's residents voted overwhelmingly to return to the Russian Federation after the Ukrainian Maidan coup (overthrowing the elected president and establishing a Washington-controlled anti-Russian regime).
That is why Trump's full-scale tariff hikes are in line with the US's other attacks on the international trade system. In 2012, during Obama's Democratic administration, the US blocked the appointment of new judges to the World Trade Organization's highest trade court, claiming the institution favored China and "threatened American sovereignty" — according to the US Constitution, foreign courts cannot override US court rulings.
The Biden administration not only maintained tariffs on Chinese goods but also further taxed electric vehicles, solar panels, and wind turbines, increasing the cost of the US energy transition. At the same time, it strengthened export controls on high-tech products (such as chips and lithography machines) through the "small yard, high wall" policy. Trump's second term further intensified the sanctions on Cuba and Venezuela continued by the Democratic administration. These measures cannot simply be attributed to "temporary measures" or "Trump's madness," but are inevitable responses to the challenges to US global hegemony.
Previously, the US's bilateral tariffs and showy evaluation systems have now upgraded to a global tariff scheme — especially targeting traditional trade partners such as Canada, Mexico, the EU, and India.
When the US withdrew from the WTO and announced its tariff plan, it explicitly stated its intention to abolish the "Generalized System of Preferences" (which provides general, non-discriminatory, and non-reciprocal preferential tariffs to developing countries). Although Trump emphasized "freedom" in his speech, he introduced the principle of "reciprocity," but revised this mechanism originally designed to provide benefits to underdeveloped countries. According to his so-called "reciprocity," even African countries with negligible trade shares with the US would be subjected to 80% tariffs.
In reality, this mechanism has long hindered developing countries —免税优惠通常仅适用于初级低附加值产品，反而制约发展中国家的工业化进程。但如今白宫连这点有限利益也要剥夺。
In the US, the measures to raise tariffs have received explicit support from part of the domestic bourgeoisie. These companies can capture the domestic market by replacing imported goods. The tech giant capital that fully supports Trump expects to gain an advantage in the technology competition with China by restricting Chinese high-tech sectors.
Transnational corporate groups that suffer losses will be compensated by another important measure announced on the same day in the US: a significant reduction in corporate taxes. Trump essentially practices 19th-century mercantilism — using import tariffs to offset trade deficits. In effect, he plays the role of a "reverse Robin Hood": the poor and middle class bear the hardship of rising prices, while large corporations enjoy the benefits of tax cuts.
These measures by Trump have impacted the two pillars of the US economic growth in recent years.
The first is the multilateral trade system established under US leadership after World War II: promoting trade liberalization through the General Agreement on Tariffs and Trade (GATT) to lay the foundation for the World Trade Organization (WTO). This system benefited the US greatly for nearly 70 years until the 2008 financial crisis.
The second is globalization — ironically, this began with the US unilaterally lowering tariffs and forcing other countries to follow.
Comparing the US hegemony crisis of the 1970s
The US experienced a hegemony crisis as early as the 1970s. At that time, its imperial authority faced three challenges: economically, Japan and Germany's heavy industries surpassed the US; militarily, the defeat in the Vietnam War; and monetarily, multiple countries jointly pushed for a basket of currencies to replace the dollar as a reserve currency. This move to de-dollarize was a response to the 1971 decision to decouple the dollar from gold. Nixon did this to solve the fiscal deficit caused by the Vietnam War and to lay the foundation for the current global financial system mechanism — forcing countries to purchase U.S. bonds to recoup dollars, paying for Washington's growing fiscal deficit, while reducing the cost of consumer credit for Americans. Essentially, countries around the world have been providing funding for the U.S. government and its citizens since then.
In 1979, as the dollar decoupled from gold and continued to depreciate, criticism increased. Just like today, when threatened, American imperialism took an offensive rather than a defensive strategy. The US launched a combination punch: on one hand, it dramatically raised the benchmark interest rate (from 11% to 20.5% between 1979 and 1981), attracting global capital to pursue high-yield bonds from the Federal Reserve, economically holding allies hostage and reviving the dollar's hegemony, but third-world countries fell into debt crises due to soaring interest rates; on the other hand, Reagan initiated the deregulation of the financial system, not only reinforcing Nixon's financial strategy but also expanding the dollar's hegemony globally through "financialization."
Against Japan, the US pushed the Plaza Accord — this Asian country, which has stationed tens of thousands of U.S. troops since the end of World War II, was forced to accept a sharp appreciation of the yen, destroying the competitiveness of its export sector. Militarily, the Reagan administration increased military industry spending (funds mainly from the new global financial system), accelerating the arms race with the Soviet Union, financially strangling the opponent, ultimately leading to the dissolution of the Soviet Union in 1991.
In short, the Washington offensive strategy achieved its goals, and the US consolidated its global hegemony. After 1991, there was no rival capable of challenging its unprecedented unipolar hegemony.
We are currently facing a new period of crisis for US hegemony. Unlike the past US-Soviet confrontation, China has become the US's economic and political dual competitor. Since 2014, China has exceeded the US in terms of GDP calculated by purchasing power parity, and has led in multiple technical fields. In January 2025, US Secretary of State Marco Rubio called China the "greatest threat" in US history, surpassing the Soviet Union. Data comparison shows: In 1975, the peak of the Soviet economy, its GDP calculated by purchasing power parity was only 58% of the US; while in 2024, China's GDP reached 133% of the US.
The US also faces challenges in the military field — Russia has the world's most advanced "Olesnik" hypersonic missile (any existing defense system cannot intercept), and China continues to make breakthroughs in military equipment innovation. Besides China and Russia, it seems that the White House has identified new threats: the BRICS countries.
BRICS Countries: Promising but Struggling
From the 2024 campaign period to the first day of the Rio Summit in July, Trump's repeated threats against the BRICS countries indicate that Washington has realized the challenge posed by the organization to the declining US hegemony.
In recent years, the US has escalated sanctions against many countries, weaponized the dollar and SWIFT system, seized assets of countries that challenge it (Russia, Venezuela, Afghanistan, etc.), and the NATO military push in Ukraine, and the White House's support for the genocide in Gaza — these actions have made Southern countries increasingly aware that the US is not a reliable partner and must build alternatives.
New BRICS Bank and other BRICS institutions have made considerable progress, but all parties are still expecting new breakthroughs
It is no coincidence that over 30 countries applied to join the BRICS in the past two years. After two rounds of expansion in 2023 and 2024, the number of BRICS members has increased from 5 to 10 (Saudi Arabia, invited in 2023, has not yet decided), plus 10 "partner countries".
However, despite the important steps taken in expansion, although Dilma Rousseff took over the New Development Bank (BRICS Bank) in March 2023 and made considerable progress, the BRICS countries still face difficulties in political, diplomatic, and economic cooperation — especially in specific projects related to creating a financial currency alternative to the dollar ("de-dollarization"). The key challenge lies in the "consensus" decision-making principle, which hinders the advancement of critical projects that could lay the foundation for a new global financial currency system.
At the Johannesburg Summit in 2023, President Lula announced the establishment of a working group to study the creation of a new international payment system (SWIFT alternative). In his remarks to the media, he proposed initiating discussions on a trade pricing unit within the BRICS. Although no formal agreement has been published, behind-the-scenes negotiations have continued to make progress. During Russia's chairmanship in 2024, several innovative proposals were put forward, and discussions continue during Brazil's chairmanship this year. The following are some of the proposals listed by negotiation stage:
a. New International Payment System: Creating a SWIFT alternative to promote trade in local currencies, supported by President Lula. During Brazil's chairmanship this year, the issue has been repeatedly emphasized, advocating that it could reduce transaction costs, and in diplomatic language, avoiding the use of terms like "de-dollarization" or "dollar replacement".
Technically, such a system is not difficult to implement — China, Russia, and Indonesia already have independent international payment systems, which can serve as the basis for the BRICS system integration. The key lies in political considerations: the White House will certainly oppose it, and some BRICS members still fear the US response. Russia, Iran, and member states and partner countries like Cuba will immediately benefit (currently excluded from SWIFT). Bilateral relationships such as Sino-Russia (nearly 100% settlement in local currency), Sino-India (about 90%) have made significant progress. China and Indonesia have just announced the start of local currency trade, and India, a target of US sanctions, has declared the promotion of rupee internationalization. Faced with Washington's attacks on many countries, the probability of establishing a new payment system is increasing.
b. Contingency Reserve Arrangement (CRA): Established in 2014 alongside the New Development Bank, it aims to provide an IMF alternative for member states facing international reserve liquidity shortages. This virtual fund pool has a size of $100 billion, funded by the original five countries in proportion (China 41%, Russia, Brazil, India each 18%, South Africa 5%). However, it has never been used — because countries have sufficient reserves and do not need to draw on them.
Last year, two new members, Egypt and Ethiopia, had to accept damaging IMF agreements: Ethiopia signed a $10.4 billion loan (about 8% of GDP), with conditions harsher than Argentina, forcing the privatization of banks, telecommunications, and other strategic sectors, and currency depreciation, now completely dependent on Washington. The BRICS countries have a fund pool that has not been used, but new members are still sacrificing their economies, which creates a great contradiction.
Another challenge is that the CRA charter requires the establishment of a "supervisory unit" to assess loans, but this mechanism has yet to be in place. If a loan application is now made, only 30% of the amount can be approved independently by the BRICS, while the remaining 70% still requires IMF approval — this fund, created as an alternative to the IMF, still needs to rely on the IMF for operations. This year, negotiations on the revision of the CRA have begun, possibly expanding the fund's coverage to all members and incorporating new currencies. If the CRA can truly replace the IMF, which has promoted neoliberalism to the Global South for decades, it would be a historic victory for the BRICS.
c. BRICS Reinsurance Company: Reinsurance is insurance for insurers, maintaining market stability by guaranteeing underwriting capacity. Currently, the reinsurance industry is dominated by Western companies and has become a "sanction enforcer" in geopolitics (such as the NATO oil price cap on Russia). If a country purchases Russian oil at an excessive price, Western reinsurers will refuse to underwrite. Establishing a BRICS reinsurance company could form a shield against Western sanctions. This proposal, put forward by Russia in 2024, is currently under negotiation.
d. Food Exchange: This is another Russian proposal, currently in the early stages of negotiation. The BRICS twenty countries account for 60% of global rice production, 55% of soybean production, 50% of wheat production, and 46% of corn production. As Putin said: "Since we produce most of the world's food, why are prices still determined by the Chicago Exchange?" A food exchange could enhance price transparency and the voice of producers, combat global market speculation. Another discussion involves establishing a BRICS "food buffer reserve": when member states face supply crises, the group can ensure food supply. This would significantly enhance collective food sovereignty.
This proposal also has another strategic dimension — which brings us back to the "de-dollarization" issue. Food is a commodity, and a crucial pillar of the US dollar hegemony is that 80%-90% of global commodities (including energy and minerals) are priced in dollars. This forces countries to continuously acquire dollars to import basic products such as food and energy.
If the BRICS countries establish a food exchange and open the market to currencies such as the yuan, real, ruble, and rupee, it would reduce the demand for dollars in international reserves, lower liquidity risk. Similar mechanisms can be implemented in the energy sector — the BRICS countries not only have 50% of global oil reserves and 60% of natural gas reserves, but also dominate renewable energy (China, Brazil, India) and nuclear energy (China, Russia) production. Possessing the advantages of controlling global key commodities (energy, minerals, and food) reserves and output volumes contains huge geopolitical potential that the BRICS must explore in the future.
People often refer to the "Bandung spirit" of the 1955 Indonesian Bandung Conference as the inspiration for BRICS cooperation, but in the commodity field, it may be necessary to draw on the "OPEC spirit": the BRICS countries can use their control over the global market for strategic commodities to gain pricing influence, increase revenue, and ultimately form a strategic deterrence against the West.
Expansion has increased the complexity of negotiations, making consensus increasingly difficult. Perhaps it is now time to discuss the consensus mechanism itself — allowing a few countries (such as five or six) to pilot the proposals first, and other countries can choose to join based on the implementation results.
Is Trump forging cohesion for the BRICS?
The BRICS cooperation holds tremendous potential, but it must begin to translate into reality. If it cannot demonstrate tangible benefits for the people of member countries in the coming years, the organization may face legitimacy doubts, becoming another "Group of 77." People's support is crucial for maintaining membership status — even if a newly elected leader intends to leave the group (such as Argentina's Milei), public opinion can force the government to stay. But this is conditional on the people genuinely feeling the benefits of BRICS cooperation in their lives.
Although the US senses the threat to its hegemony, it still has the means to reverse historical processes (including war). The opponents of the Global South have never been so strong, but if they cannot transform political unity into concrete actions, the empire may still maintain its global rule through bombs, dollars, and data control. If the aforementioned proposals are implemented, it will weaken the dollar hegemony and bring tangible benefits to the people of various countries.
And now, Trump is wielding a machine gun-like tariff and extortion tactics (reminiscent of the "no way to refuse" style of a godfather), targeting at least five BRICS countries: China, Brazil, South Africa, Iran (military level), and surprisingly India. These attacks not only threaten the sovereignty of various countries, but also touch the long-standing national dignity. Trump's intervention in the class struggle fields weakens pro-American anti-BRICS/anti-China/anti-Russia forces, but strengthens the forces supporting diversified trade partners and BRICS solidarity.
Tianjin SCO Summit in September
Brazil, India, and South Africa are currently undergoing similar processes — just like the wave of attacks against Russia in 2014 and 2022, and against China since 2018, when the pro-Western liberal forces in both countries were seized by the native patriotic thoughts. In China, Trump's first term launched a "trade war" against China and sanctioned tech companies, awakening the awareness of the Asian giant "no longer relying on the US", prompting China to accelerate the development of high-end chips and other high-tech fields. The Chinese people thus gave Trump the nickname "Chuan Jiu Guo" (Chairman of the Country). Will he play a similar role in BRICS countries such as Brazil and India now?
Things are starting to change. In recent weeks, there have been frequent diplomatic interactions between Russia, China, Brazil, and India. Phone calls and high-level visits are reshaping the diplomatic landscape of the main BRICS economies. In recent years, the Sino-Indian relationship, which had affected the BRICS process due to border disputes, has shown positive improvements. On August 18, Chinese Foreign Minister Wang Yi visited India, and the subsequent results of the talks were particularly notable, not only involving a rare earth trade agreement, but also export licenses for advanced tunnel boring machines, and the resumption of direct flights at an appropriate time.
On late August 2025, Modi made his first visit to China in seven years to attend the Shanghai Cooperation Organization Summit. The images of Xi Jinping, Modi, and Putin interacting amicably in Tianjin spread around the world, symbolizing the warming of relations between the two Asian giants under Russian mediation. Moscow, with its good relations with both sides, has not only prevented the deterioration of Sino-Indian relations in recent years but also played a key role in finally achieving a peace agreement. As President Xi Jinping poetically put it: "The dragon and the elephant dance together now."
Can these new developments enhance the much-anticipated cohesion of the BRICS countries and awaken the potential energy of the organization's strategic partnership? It can be certain that this organization, which accounts for 40% of the global purchasing power parity GDP and almost half the population, is facing many possibilities. Trump may be forging a "spark of fire" for the BRICS!
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