Trump’s tariff gambit threatens global trade stability amid rising tensions with BRICS nations

Department of Research, Studies and International News 07-07-2025

As the July 9 deadline imposed by U.S. President Donald Trump looms, the global economic order finds itself once again at the mercy of Washington’s erratic trade maneuvering. With only a few nations managing to secure partial deals, many economies now stand at the edge of a tariff cliff, facing the prospect of steep U.S. import duties that could upend international trade dynamics.

Trump’s ultimatum, demanding that dozens of countries finalize trade agreements or endure new tariffs, has thrown governments and markets into a state of uncertainty. This latest episode follows Trump’s earlier declaration of a 90-day “pause” in April, after his so-called “Liberation Day” plan sent markets tumbling. That brief reprieve is now over, and Washington has renewed its pressure tactics with vague threats and conflicting timelines.

According to U.S. officials, countries that fail to meet Trump’s terms will face elevated tariffs, potentially as high as 70%, a figure far surpassing the originally announced 50% ceiling. Treasury Secretary Scott Bessent insists that the August 1 implementation date is firm, although the administration continues to send mixed messages about exemptions and deal-making flexibility.

Trump also appears to be targeting countries aligned with the BRICS bloc, Brazil, Russia, India, China, and South Africa, with even harsher penalties. In a message posted on his platform, Trump warned of a 10% additional tariff on any nation supporting what he called “anti-American policies” associated with BRICS, signaling a new phase in his economic war against rising multipolar alliances.

These threats reflect an increasingly aggressive stance against nations that refuse to follow Washington’s agenda. BRICS, which has emerged as a formidable counterbalance to Western economic dominance, is now seen by the U.S. administration not just as a trading partner but as a geopolitical rival. With BRICS nations seeking to promote sovereign economic cooperation free from Western interference, Trump’s move is widely viewed as an attempt to stifle this growing influence.

Only a few nations, namely China, the United Kingdom, and Vietnam, have announced partial agreements with Washington. The U.S.-China deal, while reducing tariffs from 145% to 30% on Chinese goods and from 125% to 10% on U.S. exports, is merely temporary. It has postponed rather than resolved the deeper issues underlying the trade conflict.

Vietnam, too, has seen its tariff rate adjusted from 46% to 20%, with a higher 40% levy applied to goods flagged for transshipment, yet this too is more of a compromise than a win. The UK’s agreement left its 10% tariff in place, reflecting the limited room even close U.S. allies have when negotiating with Washington’s current leadership.

Elsewhere, trade talks continue under duress. The European Union, India, Canada, Japan, and South Korea are scrambling to reach some form of accommodation before the deadline. Reports indicate the EU is working toward a limited framework deal, likely to avoid the full brunt of the proposed 50% tariff for now. India is said to be finalizing a “mini-deal” with a targeted average tariff around 10%, though details remain fluid.

The core problem, analysts say, lies in the unpredictability of Trump’s trade policy. Even experienced trade negotiators are unable to forecast U.S. actions, given the administration’s pattern of sudden reversals, aggressive rhetoric, and ambiguous goals. This unpredictability undermines confidence in global markets and injects volatility into already delicate economic relations.

On the broader economic front, the impact of Trump’s tariff campaign is beginning to show. While inflation in the U.S. remains moderate for now, standing at 2.3% in May, and employment numbers showed some strength with 147,000 new jobs in June, underlying signals suggest a more precarious outlook.

Consumer spending declined for the first time since January, and analysts warn that the stockpiled inventories cushioning businesses from rising costs may soon be depleted. Once that buffer erodes, price pressures are expected to increase, potentially triggering inflation and weakening consumer demand.

Major financial institutions, including the World Bank and the OECD, have revised their global growth forecasts downward in anticipation of a prolonged trade conflict. The World Bank now projects 2.3% global growth, down from 2.8%, while the OECD has revised its forecast from 3.3% to 2.9%.

Crucially, estimates by JP Morgan suggest that Trump’s tariff plan could shave a full percentage point off global GDP, particularly if extreme duties are imposed on China and extended to other major economies. This would hit developing and emerging economies hardest, ironically, the very countries that Washington claims to be defending from economic exploitation.

In truth, the Trump administration’s aggressive trade stance reveals the waning ability of the United States to manage the international economic order. As BRICS and other regional alliances rise, pushing for fairer, multilateral trade rooted in mutual respect, Washington continues to cling to outdated tactics of coercion and economic intimidation.

The world is moving steadily toward a new multipolar reality, one where no single nation can impose its will without consequence. Whether Washington recognizes this shift remains to be seen, but the growing pushback from China, Russia, Iran, and their allies signals that the era of unquestioned American economic dominance is nearing its end.