US President-elect Donald Trump has raised the stakes for the BRICS bloc—Brazil, Russia, India, China, South Africa, and newcomers Egypt, Iran, Ethiopia, and the UAE—by threatening one hundred pc tariffs on their exports in the event that they transfer to create a standard foreign money. This announcement underscores Trump’s long-standing protectionist commerce insurance policies and his intent to claim the US greenback’s dominance in international commerce.
In a message posted on Reality Social, Trump’s social media community, the US President-elect acknowledged, “The concept the BRICS nations try to maneuver away from the Greenback whereas we stand by and watch is OVER.” His feedback come amid renewed discussions inside BRICS about making a foreign money different to the greenback—a transfer that has confronted inside hurdles however stays a focus of their financial ambitions.
BRICS is an intergovernmental group comprising Brazil, Russia, India, China, and South Africa. The time period “BRIC” was launched in 2001 by economist Jim O’Neill to explain these rising economies. The group’s first formal summit was held in Yekaterinburg, Russia, in 2009, marking its official formation. South Africa joined in 2010, increasing the acronym to BRICS. Since then, BRICS has aimed to advertise peace, safety, and growth by annual summits and coordinated multilateral insurance policies.
What’s at Stake for Egypt?
Egypt, which formally joined BRICS in 2023, stands at a pivotal juncture in its financial technique. Its inclusion within the bloc aligns with its targets to diversify partnerships and cut back dependence on the US greenback. Commerce between Egypt and BRICS members constituted over a 3rd of Egypt’s exterior commerce in 2022, valued at roughly USD46.7 billion. Membership in BRICS may assist alleviate Egypt’s international foreign money disaster by selling commerce in native currencies or by a shared BRICS mechanism.
Nevertheless, Trump’s tariff threats pose a big problem. With the US as a key commerce associate for Egypt—notably in sectors like textiles and agriculture—a blanket tariff may devastate export revenues and destabilize native industries depending on US markets.
The Greenback vs. a BRICS Forex
The idea of a BRICS foreign money has gained traction as members purpose to cut back the greenback’s grip on international commerce and mitigate vulnerabilities to US sanctions. Russia and China have spearheaded these discussions, with help from different members like Brazil. But, the initiative has confronted setbacks as a result of political and financial variations throughout the bloc.
For Egypt, supporting a BRICS foreign money may foster higher financial resilience. It may additionally place the nation as a regional hub for commerce amongst rising economies.
Nevertheless, this transfer would require delicate diplomacy to keep away from alienating Western allies just like the US. Egypt and the U.S. share a strategic partnership that peaked throughout Donald Trump’s presidency, marked by robust ties with President Abdel Fattah Al-Sisi. Regardless of tensions over human rights, resembling a US support suspension in 2017, cooperation on counterterrorism and financial ties flourished. Sisi’s 2019 White Home go to and his congratulations to Trump after his 2024 re-election spotlight Egypt’s dedication to sustaining this relationship.
Trump’s Historical past with Tariffs
Trump’s use of tariffs as a bargaining chip just isn’t new. Throughout his first time period, he imposed steep levies on Chinese language items, sparking a commerce struggle that disrupted international markets. Whereas he touted tariffs as a win for American staff, research indicated that US shoppers and companies bore a lot of the financial burden. Trump’s Treasury Secretary nominee Scott Bessent has described his technique as “escalate to de-escalate,” utilizing threats as a negotiation instrument moderately than a definitive coverage.
Trump’s newest menace to BRICS displays this identical technique, designed to strain the bloc into sustaining the greenback’s establishment. Nevertheless, it dangers accelerating the very shift he seeks to stop, as BRICS nations might redouble efforts to cut back reliance on US monetary methods.
International Ramifications
Trump’s tariffs may have widespread repercussions past BRICS. Analysts recommend that penalizing a bloc representing 40 % of the world’s inhabitants and practically 1 / 4 of worldwide GDP would upend international provide chains and commerce methods. For Egypt, the stakes are notably excessive, because it seeks to capitalize on its BRICS membership, it should navigate a unstable geopolitical panorama marked by US-China tensions, sanctions on Russia, and evolving alliances within the Center East.
Egypt’s participation in BRICS alerts its ambition to play a extra influential position in international financial governance. But, balancing these aspirations with the dangers of alienating the US requires strategic policymaking.
Because the BRICS bloc contemplates its subsequent strikes, Egypt faces essential choices. Its success throughout the group is determined by leveraging its geographic and financial benefits whereas mitigating dangers posed by exterior pressures like Trump’s tariff threats. The worldwide financial order is shifting, and Egypt’s position inside BRICS will probably form its trajectory within the years to come back.
