Trump Warns: 10% Additional Tariff on Nations Siding With BRICS

July 7, 2025

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Why In The News?

U.S. President Donald Trump has warned nations that an additional “10%” tariff will be imposed against those countries that plans to support Anti-American policies of the BRICS.

In a post on his Truth Social platform, Trump declared, “Any Country aligning itself with the anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff. There will be no exceptions to this policy.”

This statement comes after BRICS addressed “serious concern” over the increase of tariffs, which is inconsistent with the rules of the World Trade Organization. These changes, BRICS noticed, would reduce global trade, disrupt global changes and cause uncertainty.

“The global economy and financial markets have increasingly been subject to elevated uncertainty and bouts of intense volatility,” the joint statement reads

BRICS has also showcased its concern over the dominance of the US Dollar in the market: a debate has been ongoing about whether there should be a BRICS currency as a competition to the dollar, and it would pose a threat or challenge to the US dollar.

During the Summit, BRICS condemned the attacks on Iran, marking them as violations of international law and the UN Charter, especially targeting “peaceful nuclear facilities” and civilian infrastructure.

Liberation Day: Economic Independence or Economic Turbulence?

Trump, on what he calls a ‘liberation day’, announced that there will be a universal tariff tax of 10% on imported goods, followed by various other tariffs that would go up to 50%, depending on the trade relationship the US has with a country.

For many countries, such as China and the EU, the tariffs would be 34% and 20% respectively, as they have a higher trade deficit with the USA.

Canada and Mexico are likely to be exempted from this.

Economists warned it could lead to higher inflation, supply shortages, and even recession risks if other countries retaliated.

Due to the backlash, the policy was stopped mid-April for 90 days and aims to resume by July 7th. The tariff letters have been sent to various countries, and their response is awaited.

BRICS countries condemned the policy as “economically dangerous” and “politically motivated.” Some began exploring alternatives to the U.S. dollar, fueling de-dollarisation talks.

What does this mean for India?

The “Liberation Day” tariffs are likely to affect India in several ways. As one of the 57 countries facing elevated U.S. tariffs, India could see reduced demand for its exports like textiles, pharmaceuticals, and auto parts, which will become more expensive in the American market.

This may hurt small and medium-sized businesses and create economic uncertainty. Additionally, India’s position as a BRICS member, opposing such tariffs, adds diplomatic tension. However, if supply chains shift away from China, India may find opportunities to emerge as a preferred U.S. trade partner in select industries.

Credit for header image: Financial Express
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