BRICS vs. The West
On July 7, 2025, leaders of the BRICS group convened in Rio de Janeiro to reaffirm the bloc’s commitment to updating international governance for a multipolar 21st century. Brazilian President Luiz Inacio Lula da Silva decried the “unparalleled collapse of multilateralism” and criticized NATO’s new 5% GDP defense spending target as fueling a global arms race.
BRICS delegates jointly condemned U.S. President Donald Trump’s “indiscriminate” tariff measures—warning that unilateral tariffs distort trade and hamper global development—and responded to Trump’s threat of up to 50% tariffs by August 1 and an additional 10% tariff on any country aligning with “Anti-American policies of BRICS.”
Chinese President Xi Jinping and Russian President Vladimir Putin were absent: Xi sending Premier Li Qiang in his stead, and Putin participating by videoconference to avoid arrest under an ICC warrant. In his remarks, Putin declared that liberal globalization is becoming obsolete as business shifts to emerging markets.
Base Case Scenario (60% Probability)
Tensions between the U.S. and BRICS intensify, but full-scale trade wars are avoided. The U.S. enacts moderate tariffs, prompting partial retaliatory measures from BRICS. Global markets experience periodic volatility, but adjustments are made over time. BRICS economies accelerate regional cooperation and investment in alternative financial systems, while the U.S. strengthens trade ties with allies. Global GDP growth slows modestly, with inflation peaking mid-2026 before stabilizing.
Upside Scenario (20% Probability)
Diplomatic channels remain open and lead to a negotiated resolution that averts major tariffs. Both blocs agree on incremental reforms to the WTO and international governance. Markets rebound with renewed investor confidence, global trade recovers, and BRICS nations benefit from increased cooperation. The push for multipolarity is institutionalized peacefully through expanded roles for BRICS-led financial entities.
Downside Scenario (20% Probability)
The U.S. imposes maximum proposed tariffs, followed by sweeping retaliatory tariffs from BRICS. Trade volumes drop sharply, triggering global recession. Emerging markets suffer currency crises, while Western economies face prolonged inflation. Military spending rises across the board, draining public funds from critical services. Diplomatic fractures deepen, and international institutions are sidelined in favor of fragmented regional blocs.
