Putin and Xi's plot to topple the US dollar is dead

Telegraph

2 days ago

As the 17th Brics Summit kicks off in Rio de Janeiro, Brazil, this weekend, leaders of two of the most important founding nations will be conspicuous by their absence. Chinese president Xi Jinping will skip the meeting, for the first time in more than a decade, sending Premier Li Qiang in his stead. Russia's Vladimir Putin is also sitting this one out. Foreign minister Sergei Lavrov will represent Russia, in light of the outstanding International Criminal Court (ICC) arrest warrant against the Russian president, which Brazil would be obliged to enforce.
But there may be more to their decision to avoid the summit than meets the eye.
The Brics has been on Donald Trump's target list ever since he won the 2024 election. In January, 10 days after he started his second term as president, Trump issued a statement on Truth Social. 'We are going to require a commitment from these seemingly hostile Countries that they will neither create a new Brics Currency, nor back any other Currency to replace the mighty US Dollar or, they will face 100 per cent Tariffs'.
Formally founded in 2009 by Brazil, Russia, India, and China, the Brics – which South Africa joined a year later – has since expanded to include 10 countries, with Egypt, Ethiopia, Iran, the United Arab Emirates and Indonesia all now members. Effectively created to act as a counterweight to perceived US and Western dominance in international institutions, it has since become far more than just a talking-shop for emerging economies. The group has expressed an interest in challenging the hegemony of the US dollar, ending its role as the preferred currency for conducting international transactions.
This ambition will have been driven in part by fears among the member nations – many of which are governed by authoritarian regimes – of financial sanctions, should the US seek to punish them for behaviour contrary to international norms. The concept of creating a Brics currency, as an alternative to the dollar, gained additional momentum in the aftermath of Russia's invasion of Ukraine, which saw Moscow hit with significant US and European sanctions, Russian banks removed from the SWIFT payment system, and Russian international currency reserves frozen.
But since the beginning of the year, Trump's threats against the Brics have escalated. 'There is no chance that Brics will replace the US Dollar in International Trade, or anywhere else, and any Country that tries should say hello to Tariffs, and goodbye to America!' he said in January. In February, as he was heading out to meet with Narendra Modi, the prime minister of India, Trump pronounced the Brics 'dead,' adding that 'if they want to play games with the dollar, they're going to be hit with a 100 per cent tariff'.
In April, Trump's tariff blitzkrieg sent shockwaves across the Brics nations, prompting foreign ministers from the member countries, led by Brazilian ambassador Mauricio Lyrio, to begin coordinating a response criticising 'unilateral measures of any origin'. The planned joint declaration fell through, however, due to internal disagreements. Failing to reach consensus, the joint statement was replaced with a 'chair statement', containing generic language that did not name the US.