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 100 percent tariffs on their exports if they move to create a common currency. This announcement underscores Trump’s long-standing protectionist trade policies and his intent to assert the US dollar’s dominance in global trade.
In a message posted on Truth Social, Trump’s social media network, the US President-elect stated, “The idea that the BRICS countries are trying to move away from the Dollar while we stand by and watch is OVER.” His comments come amid renewed discussions within BRICS about creating a currency alternative to the dollar—a move that has faced internal hurdles but remains a focal point of their economic ambitions.
BRICS is an intergovernmental organization comprising Brazil, Russia, India, China, and South Africa. The term “BRIC” was introduced in 2001 by economist Jim O’Neill to describe these emerging economies. The group’s first formal summit was held in Yekaterinburg, Russia, in 2009, marking its official formation. South Africa joined in 2010, expanding the acronym to BRICS. Since then, BRICS has aimed to promote peace, security, and development through annual summits and coordinated multilateral policies.
What’s at Stake for Egypt?
Egypt, which officially joined BRICS in 2023, stands at a pivotal juncture in its economic strategy. Its inclusion in the bloc aligns with its goals to diversify partnerships and reduce dependence on the US dollar. Trade between Egypt and BRICS members constituted over a third of Egypt’s external trade in 2022, valued at approximately USD46.7 billion. Membership in BRICS could help alleviate Egypt’s foreign currency crisis by promoting trade in local currencies or through a shared BRICS mechanism.
However, Trump’s tariff threats pose a significant challenge. With the US as a key trade partner for Egypt—particularly in sectors like textiles and agriculture—a blanket tariff could devastate export revenues and destabilize local industries dependent on US markets.
The Dollar vs. a BRICS Currency
The concept of a BRICS currency has gained traction as members aim to reduce the dollar’s grip on global trade and mitigate vulnerabilities to US sanctions. Russia and China have spearheaded these discussions, with support from other members like Brazil. Yet, the initiative has faced setbacks due to political and economic differences within the bloc.
For Egypt, supporting a BRICS currency could foster greater economic resilience. It could also position the country as a regional hub for trade among emerging economies.
However, this move would require delicate diplomacy to avoid alienating Western allies like the US. Egypt and the U.S. share a strategic partnership that peaked during Donald Trump’s presidency, marked by strong ties with President Abdel Fattah Al-Sisi. Despite tensions over human rights, such as a US aid suspension in 2017, cooperation on counterterrorism and economic ties flourished. Sisi’s 2019 White House visit and his congratulations to Trump after his 2024 re-election highlight Egypt’s commitment to maintaining this relationship.
Trump’s History with Tariffs
Trump’s use of tariffs as a bargaining chip is not new. During his first term, he imposed steep levies on Chinese goods, sparking a trade war that disrupted global markets. While he touted tariffs as a win for American workers, studies indicated that US consumers and businesses bore much of the economic burden. Trump’s Treasury Secretary nominee Scott Bessent has described his strategy as “escalate to de-escalate,” using threats as a negotiation tool rather than a definitive policy.
Trump’s latest threat to BRICS reflects this same strategy, designed to pressure the bloc into maintaining the dollar’s status quo. However, it risks accelerating the very shift he seeks to prevent, as BRICS nations may redouble efforts to reduce reliance on US financial systems.
Global Ramifications
Trump’s tariffs could have widespread repercussions beyond BRICS. Analysts suggest that penalizing a bloc representing 40 percent of the world’s population and nearly a quarter of global GDP would upend global supply chains and trade systems. For Egypt, the stakes are particularly high, as it seeks to capitalize on its BRICS membership, it must navigate a volatile geopolitical landscape marked by US-China tensions, sanctions on Russia, and evolving alliances in the Middle East.
Egypt’s participation in BRICS signals its ambition to play a more influential role in global economic governance. Yet, balancing these aspirations with the risks of alienating the US requires strategic policymaking.
As the BRICS bloc contemplates its next moves, Egypt faces critical decisions. Its success within the group depends on leveraging its geographic and economic advantages while mitigating risks posed by external pressures like Trump’s tariff threats. The global economic order is shifting, and Egypt’s role within BRICS will likely shape its trajectory in the years to come.
