【By Observer News, Xiong Chaoran】On the morning of July 6 local time, the 17th BRICS Leaders' Summit, which lasted two days, officially opened in Rio de Janeiro, Brazil.

During the summit, when talking about the increasing use of national currencies in BRICS trade, Russian Finance Minister Anton Siluanov (Anton Siluanov) told RT that Western financial institutions could suspend transactions at any time, and using national currencies for trade settlement provided a reliable alternative to the Western financial system.

"This settlement has proven its reliability and independence, free from the influence of Western lending institutions. In fact, Western lending institutions can suspend payments at any time," he also cited the Russia-China trade as an example, pointing out that almost all transactions are now settled in rubles and yuan. The bilateral trade volume between the two countries reached a record high of 245 billion U.S. dollars last year, and the current trade volume is still increasing and may continue to grow.

Russian Finance Minister Siluanov RT

RT pointed out that in recent years, member states of the BRICS group have accelerated efforts to reduce dependence on third-party currencies in bilateral trade, especially after the outbreak of the Ukraine conflict in 2022, when Western sanctions led to the freezing of Russia's dollar and euro reserves.

Siluanov said that Russia is ready to provide financial mechanism schemes to reduce the risk of sanctions, and this issue was discussed earlier that day at the meeting of the president of the New Development Bank (NDB), also known as the "BRICS Bank." He pointed out that such mechanisms "would not involve Western financial infrastructure, nor would they be settled in the currencies of countries that imposed sanctions on Russia, and would ensure that the 'BRICS Bank' is free from possible risks."

RT said that since 2022, when major Russian banks were excluded from the SWIFT international settlement system, Russia has intensified actions with many trading partners to reduce dependence on the Western financial system. The banking and business sectors are actively seeking alternative financial platforms, including the use of non-SWIFT fund messaging systems, and expanding the use of local currencies in trade settlements.

Siluanov pointed out that current transactions are being handled through reliable banks with direct agency relationships, thus bypassing the Western-controlled financial system. He emphasized that expanding these direct financial links is key to maintaining trade volumes and ensuring smooth settlements.

The BRICS cooperation mechanism started in 2006, consisting of China, Russia, India, Brazil, and South Africa. The member states account for 26.46% of the world's total land area and 41.93% of the world's total population. In recent years, the international influence of the BRICS countries has been constantly increasing. On January 1, 2024, with Saudi Arabia, Egypt, the UAE, Iran, and Ethiopia becoming official members, the number of BRICS members increased from five to ten.

New Development Bank of BRICS headquartered in Shanghai IC Photo

As early as November last year, before taking office, Trump had already issued threats on his self-created social media platform "Truth Social" demanding that the BRICS countries abandon any plans to create new currencies or support alternatives to the U.S. dollar, otherwise imposing 100% tariffs on any country challenging the U.S. dollar's dominant position in the global economy.

"The BRICS countries are trying to get rid of the dollar, and we can only watch. This idea has ended. We need the commitment of these countries, they will neither create a new BRICS currency nor support any other currency to replace the strong U.S. dollar, otherwise they will face 100% tariffs and should be prepared to say goodbye to the opportunity to enter this great American economy. They can find another 'sucker'! It is impossible for the BRICS countries to replace the U.S. dollar in international trade. Any country that tries to do so should wave goodbye to the United States," Trump claimed at the time.

Hong Kong's South China Morning Post reported in December last year that at the time of Trump's threatening remarks, the BRICS countries were continuing to discuss how to reduce their reliance on the U.S. dollar through potential alternative currencies or new trade mechanisms.

Last October 22 to 24, the 16th BRICS Leaders' Summit was held in Kazan, Russia. According to TASS, Russian President Putin announced that the BRICS leaders adopted the Kazan Declaration after the summit, and during the summit, the BRICS leaders also heard reports from officials of the BRICS mechanism, including the president of the New Development Bank, Rosset.

As the host of last year's BRICS summit, Russia wanted to promote a cross-border payment system called "BRICS Bridge," which became the focus of global media. Shortly before the summit, Reuters reported that "Russia will push for ending the dominance of the U.S. dollar at the BRICS summit."

Last October 18, Putin spoke to reporters about the process of moving away from the U.S. dollar within the BRICS. He mentioned that the member states are exploring the possibility of using national currencies for transactions, and discussions on establishing a "common currency" for the BRICS have been ongoing for some time, but "the timing is not yet right." He said that due to significant differences among the countries in terms of economic structure and efficiency, careful discussion and gradual action are needed.

Local time October 23, 2024, Russian President Putin delivers a speech at the reception for the 16th BRICS Leaders' Summit. Kazan Summit website

Marina Moreno, a scholar at the Brazilian think tank "Observa China," said that due to the difficulty of coordinating monetary policies among a group of developing countries with such diverse economic systems, this idea has a long way to go before becoming a reality. She added that it took 34 years to create the EU's common currency. She also noted that the global influence of the U.S. dollar extends beyond its use in trade, including the use of U.S. Treasury bonds as a form of currency reserves, and the clearing systems that are crucial to a country's international financial status.

"Even if the BRICS countries fail to dethrone the U.S. dollar, they are likely to bypass it by supporting transaction payment systems that use local currencies," Moreno also mentioned the initiative launched by the People's Bank of China (the Cross-border Interbank Payment System, CIPS) as an example, and believed that "this is precisely why Trump made such a reaction."

Finally, Moreno believes that whether Trump will actually implement the tariff threats he announced remains to be seen, and it is worth observing how this symbolic move will affect his strategic thinking, and whether he might push for more radical monetary policies to counter those countries seeking economic independence.

Now, nearly half a year after Trump returned to power, as the voice of open cooperation of the BRICS countries echoes in South America, he once again raised the "tax knife" and openly threatened the BRICS countries on local time July 6, which quickly triggered a response from the BRICS countries.

On local time July 7, after the BRICS Leaders' Summit in Rio de Janeiro, Brazilian President Lula gave an interview where he strongly criticized Trump's threat, telling reporters, "The world has changed, we don't need an emperor." Lula emphasized that the BRICS countries want to find another way of global organization from an economic perspective, which is the reason why some people feel uncomfortable.

Earlier, Chinese Foreign Ministry spokesperson Mao Ning stated at the regular press conference on the afternoon of July 7 that the BRICS mechanism is an important platform for cooperation among emerging markets and developing countries, advocating openness, inclusiveness, win-win cooperation, not forming blocs, and not targeting any country. Regarding the imposition of tariffs, China has repeatedly stated its position, stating that trade wars and tariff wars have no winners, and protectionism has no way out.

This article is an exclusive article by Observer News, and it is not allowed to be reprinted without permission.

Original: https://www.toutiao.com/article/7524536091127366207/

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