BRICS Just "Declared War" on the U.S. Dollar

In 1944, one currency started to dominate the world. The U.S. dollar. For about 80 years, it's been the foundation of global trade and the weapon of American sanctions and the center of U.S. economic power. But in 2025, that power is under attack. President Trump has just threatened 100% tariffs on some of the world's fastest growing economies unless they do one thing. Stop what he calls a war on the U.S. dollar. It's an attack on the dollar, and we're not going to let anybody attack the dollar. Now, these are not small countries. The BRICS nations include Brazil, Russia, India, China, South Africa, and many more. And they now account for roughly 56% of the world's population and close to half of global GDP. And two of those member countries, India and Brazil, are getting hit with tariffs as high as 50% on their exports to the U.S. that are worth billions and billions of dollars a year. Now, in response, they want to fight back. It's already bad. You don't want the situation to get any worse. They want to match U.S. tariffs, redirect trade to other markets, and they want to form stronger ties within the bloc. During the call, the Indian Prime Minister and President Lula discussed ways to deepen their strategic partnership, including trade, technology, energy, defense, agriculture, health, and people-to-people ties. BRICS is accelerating a multiple-year effort to lower their reliance on the dollar. And the way they want to do that is by trading more in local currencies, building new payment systems, and even talking about a shared currency for cross-border commerce. I don't need to remain subordinate to the dollar. And if they succeed, the dollar's share of global dominance, which has already slipped from over 70% two decades ago to about 58% today, could fall a lot faster. And that means potentially higher borrowing costs for U.S. consumers, weaker sanction power, and a restructuring of the global economy. So today, I'm going to break down how BRICS just declared war on the U.S. dollar, the specific things they're doing in 2025, and what all of this means for your savings, investments, and the cost of living in America. So with that said, let's get into it. Hi, my name is Andrei Jikh. Hope you're doing well. Come for the finance and stay for the BRICS. Now, the BRICS is made up of some of the world's biggest, what are called emerging economies. Now, when economists say emerging economies, they're talking about countries that are between developing and fully developed. They've moved beyond low-income or low-industrialized status, but they're not quite at the level of places like the U.S., Japan, or Germany. They are emerging or coming out of an earlier stage where their economies were more dependent on a smaller range of specialties, things like agriculture, raw materials, or energy, which also usually means lower incomes per person, weaker capital or investment markets, and less global influence. So now they're evolving into a more diversified and globally connected economy, and they are growing their middle class as well. And in the case of BRICS, Brazil, Russia, India, China, South Africa, each country is at a different point in that journey. Brazil, for example, is emerging from a commodity-heavy economy toward more industry and services. Russia is resource-rich, but it's still working on diversifying beyond just its oil and gas specialty. India is moving away from agriculture to a tech and manufacturing powerhouse. China has transformed from a closed planned system into the world's second biggest economy. It's become the factory of the world, but with per capita income still lower than fully developed countries. South Africa is industrialized compared to the rest of Africa, but it's still battling inequality and unemployment. But the point is this. These countries have grown a lot. In 2009, the BRICS was just five countries. In 2024, they added four more. And in 2025, they got an even bigger surprise. Indonesia became a member, and nine more countries are wanting to join. That's more than the G7. And they now account for about half of global GDP. That means the BRICS are now bigger than Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, or what's called the G7 group. And here's how much they've grown. In 2009, the GDP of the G7 was bigger than any other block. But by 2025, all that changed, and the BRICS now makes up over two-thirds of the world's population and close to half of global GDP. And this is important, because even though the BRICS have been talking about an alternative to the dollar for a long, long time, 2025 is another year where they're fighting back. And the fighting started a long time ago, but it also recently got worse when the U.S. started to use the dollar and trade to sanction Russia, and that sort of sped this up. Because between 2021 to 2024, trade between BRICS nations went up by more than $700 billion. That's a huge increase in just three years. And it's not just the volume that matters, it's also how they're doing it. Because a big growing part of that trade is no longer happening in U.S. dollars. In fact, in China's overseas transactions, the yuan has overtaken the dollar for the first time in history. Because back in 2020, more than half of China's cross-border trades were settled in dollars. But by 2025, that is now flipped with over 50% now done in yuan. And this is playing out in the real banking system too, because in 2024, Southeast Asia's biggest lender called DBS reported a 30% year-over-year increase in yuan settlement flows, especially in trade between China, Latin America, and the Middle East. So this is the clearest signal that the BRICS are building an alternative system. And you can even see it in their real economies as well, because Brazil is a good example. In less than a year, thousands of cars made by Ford have disappeared from factory lots and replaced almost entirely by Chinese BYD electric cars. And BYD is now the world's biggest EV maker, and they've expanded into Brazil with multi-billion dollar investments, new production lines, and payment agreements in local currencies, which bypass the US dollar. And remember, every car sold in yuan instead of dollars is one less transaction supporting US dollar dominance. And it's also one more step towards potentially higher borrowing costs here in the US. This is what de-dollarization looks like. And this trend is probably going to continue, because more recently, two of its member countries, India and Brazil, are now being hit with US tariffs as high as 50% on billions and billions of dollars of exports. New tariffs from President Trump are increasing tensions with two US trade partners. As of today, 50% tariffs are officially in effect for Brazil. As we just discussed, the president signed an executive order also increasing tariffs on India by 25%. So right now, they're starting to feel the effects of their factories slowing down, orders being cancelled, and millions of their jobs at risk. So of course, that's why we're seeing those countries fighting back. But a quick pause because I want to show you a tool that I've been actually using that's become kind of a cheat code for my research process. It's called Moomoo. 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Plus, there's this AI tool called Moomoo AI, which you can find all the way at the top of the app, or just search for it. It's like ChatGPT for investors, but way more useful because it pulls from real-time market data. I like to ask it what's driving the market this week, and what I should look out for, and after it reasons, which it also shows me, it gives me everything I need to see from key economic releases, the catalysts, policy signals from the Fed, and even market technicals. And right now, they're running a crazy promo for new users in the US, where you can earn up to $1,000 in Nvidia stock when you deposit, and get up to 8.1% APY with their cash sweep bonus. So if you're curious, check out Moomoo using my link down below. All right, so now let's get back to it. So here's exactly how the BRICS countries are fighting back. India, for example, which was one of the closest allies to the US in the BRICS block, recently said that they will not be buying US weapons. The US now has a new problem in Asia. India has announced that they will not be buying American-made weapons following a 50% tax on their goods. Both India and Brazil are also talking about retaliation or fighting back, not just with not buying US goods or matching tariffs, but with deeper integration into the BRICS and redirecting their supply chain to other member countries, and moving away from dollar-based payments. I'm not going to give up on the idea that we need to work towards building an alternative currency so that we can trade with other countries. I don't need to remain subordinate to the dollar. And that shift is getting faster. There's talks about new payment networks that bypass SWIFT, oil sales that are priced in currencies like the Chinese yuan, and even talks about a shared BRICS currency. That's not something that's going to happen overnight, but it is a sign that the block is serious about chipping away at the dollar's dominance, which has already fallen from over 70% of global reserves two decades ago to about 58% today. So instead of putting pressure and dividing the BRICS countries, these tariffs are actually having the opposite effect. They are uniting them. They're pulling them closer together. Brazil has even filed a formal complaint at the WTO, and they're pushing their own retaliatory tariffs. We're even seeing relationships kind of change because India's Prime Minister Modi and China's Xi Jinping, which are leaders who rarely agree on anything, are also now working to rebuild their economic ties. And even at the recent BRICS summit in Rio, for example, Brazil's President Lula called on members to test the new currency, which will become a direct challenger to the dollar. Now here's how this can actually affect the United States. The first immediate reaction to the 10% tariff on BRICS plus the targeted 50% on India and Brazil is estimated to cost American consumers and businesses up to $56 billion every year in higher prices. That's everything from electronics, cars to everyday consumer goods. Now, this has not happened yet, and economists can be wrong a lot. So just keep that in mind. But that's at least what they think might happen because of this. Now, on the export side, the BRICS markets account for about one-fifth of U.S. exports. That's billions of dollars in aircraft, agricultural goods, and tech that can be lost if these countries follow through with their retaliation and they stop buying U.S. products, which would obviously affect the companies making them and their share prices. And remember, the BRICS nations control super important commodities like rare earth metals, oil, agricultural staples. So any export restrictions could ripple straight into the U.S. manufacturing sector, energy, defense, and everything else. But then there's the long-term threat, the one that doesn't really show up in the next quarter's GDP, but it could change the foundation of the U.S. economy. If BRICS expands by trading in yuan, rupees, rubles, or whatever future shared currency, the global demand for U.S. dollars will go down. That means less countries using dollars, and that means less buyers for U.S. treasury bonds. And with foreign ownership of treasuries already going down to about 30% of outstanding U.S. debt, means that if this keeps on going, it could push interest rates much higher, making it more expensive to finance U.S. deficits and more expensive for us as consumers to borrow money. Because remember, how do you incentivize people to hold and buy U.S. investments and our debt? You reward them with passive income, with higher interest rates, but that affects us as well. On top of that, the sanctions the U.S. uses, which is one of its most powerful geopolitical tools, also becomes less effective when less countries need the money to trade with. So the markets are kind of reacting. That's why you've seen bond yields have been very volatile in 2025. And also safe investments like gold and bitcoin have been outperforming, and we've seen an inflow of money every time there's some BRICS currency headline. All around the world, I think other emerging market economies are watching this fight really closely, and they're deciding whether they want to side with the U.S. and its dollar system or the BRICS block. So here's how I'm personally thinking about all of this. This is a trend that's been going on for decades. It's a story we've heard a lot about, and I think it's a story we're going to keep hearing a lot about. This is just the world changing. It's the world adapting. For me, the selfish question is, how would this change affect my way of life and my savings and my investments? Because for decades, we've had this world where the dollar strength has had a huge built-in advantage for U.S. investors. There's cheaper imports, lower borrowing costs, higher purchasing power when traveling overseas, and it's made a lot of people wealthy. And that's also what has allowed the U.S. to avoid inflation. Because dollars leaving the U.S., by way of demand, is an exit door. It's an escape for inflation to go somewhere else and not just stay here in the U.S. If that starts to change, I just want to be in a position where my portfolio could still benefit from that new world. Now, that doesn't mean I'm going to bet on the dollar collapsing. I don't think that's going to happen. But I'm also paying attention to assets that tend to hold their value over time. And I'm also paying attention on things like bond yields. Because if foreign demand for our debt, for treasury bonds, goes down, that means higher interest rates a lot longer than people expect, potentially. At the same time, though, I'm not changing my investing approach. I'm still staying invested. I'm still diversified. I'm still buying Bitcoin stocks, look at real estate from time to time. I still hold cash. I try to be all over the place so that no matter what happens, I stand to benefit from this new world. Because I have no idea where it's going to go. But stories like this, the tariffs, the BRICS currency talks, I think that they're reminders that the world can change in a lot of ways. And I just want to understand and pay attention to it. But I'd love to hear your thoughts about it and what you think will happen. As always, I hope you have a wonderful rest of your day. Smash the like button. Subscribe if you haven't already. I'd love to see you back here next week. I'll see you soon. Bye-bye.