Final Thoughts

Brazilian President Inacio Lula da Silva is planning on holding a virtual a meeting for leaders of the BRICS nations next Monday, according to a report by Bloomberg. The publication cited anonymous sources familiar with the matter. On the docket is President Trump’s trade policy.

The article stated that the meeting will not just focus on Trump’s tariffs, but also “multilateralism.” That would seem to signify a collision course with “America First.”

Some of the nations have different trade deals with the US, which would make a joint agreement difficult, according to the article. Russia, notably, has been iced out of US trade since its invasion of Ukraine in 2022.

The sources noted Lula is anxious that the meeting not turn into “an anti-US summit.”

Stil, at the same time, I think we can all agree it’s not going to be a pro-US lovefest.

Trouble brewing

Brazil has found itself on the wrong end of 50% reciprocal tariffs. A concern for the US steel industry was whether pig iron and other metallics would be included. Though they were excluded in a last-minute reprieve at the end of July, that still left many other exports facing the high tariffs.

Seeking alternatives to these tariffs, the BRICS have some cards to play, especially with steel.

As far as steelmaking goes, the BRICS nations contain some heavy-hitters, along with the world champ: China. Concerning some of the headline BRICS nations, you have China, which accounted for 53.3% of crude steel production in 2024, according to worldsteel data. Meanwhile, India produced 7.9% and Russia 3.7%. The US, by comparison, is ahead of Russia but below India at 4.2% in 2024.

China alone produces a majority of the world’s steel. And overcapacity is already a well-publicized issue. Other nations are seeking to block cheap Chinese imports. Many see this as a central issue facing world steel markets.

We have seen the US and China kick the can again recently regarding a trade deal on reciprocal tariffs (Section 232 tariffs still stand). Could this upcoming BRICS meeting distort any pact, especially if China thinks it has more leverage?

Also, will the subject of another currency to compete with the dollar be on the meeting’s agenda?

This underscores a risk with the brinksmanship of the Trump trade policy. Namely, can it go too far before a pushback occurs? There has been a focus on individual deals, but countries might regroup. Of late we have seen India pushed closer to China following Trump’s tariff deal with the South Asian nation. Is it possible the fallout from other tariff deals could cause a major realignment of world trade policy, and not to the US’ advantage?

For the past few months we have reported on every swing of the Trump tariff sledgehammer. Perhaps in the next few weeks or months we will find out what happens when the BRICS strike back.