An increasingly assertive BRICS

Critics say BRICS fails to punch its weight but the expanding forum is getting increasingly hard to ignore.
View in browser
Bloomberg

Welcome to Balance of Power, bringing you the latest in global politics. If you haven't yet, sign up here.

There they were, beaming representatives of the alternative world order lined up against the backdrop of Rio's Sugarloaf Mountain.

BRICS leaders hosted by Brazilian President Luiz Inácio Lula da Silva for a two-day summit smiled as they took on the West over issues of war and peace, trade and global governance.

The group adopted multiple positions at odds with Donald Trump, expressing "serious concerns" over trade tariffs, blasting soaring defense spending, and condemning airstrikes on Iran, a BRICS member.

It prompted an immediate reaction from the US president, who took to social media and threatened to slap an additional 10% levy on any country aligning themselves with "the Anti-American policies of BRICS."

BRICS leaders pose for a photo in Rio de Janeiro yesterday. Photographer: Dado Galdieri/Bloomberg

Until recently comprising five nations, BRICS has expanded to a club of 10 that defies easy categorization or a catchy acronym.

Where the Group of Seven originally incorporated the world's leading economies, later supplanted, if not quite replaced, by the supposedly more representative G-20, BRICS mostly acts as a forum for nations of the Global South.

That they don't reflect the US-led consensus is the point.

But while their stances clearly ran counter to Washington, the bloc shied away from naming the US directly as they chase deals lowering tariffs.

Its members are not all the best of buddies — India and China are open rivals, while Xi Jinping was one of four leaders who didn't bother to attend. Saudi Arabia can't decide if it's in or out.

Critics say BRICS, which represents 49% of the world's population and 39% of global GDP, perennially fails to punch its weight.

Unwieldy, it still refuses to go away. Countries are queueing up to participate as partners. Brazil hands over the presidency to heavyweight India.

As Trump sweeps all before him, BRICS — for all its shortcomings — is getting increasingly hard to ignore. Alan Crawford

WATCH: Trump's "America first" agenda has created an opening for the BRICS to challenge the US-led world order.

Global Must Reads

Major US trading partners hurried to secure deals or lobby for extra time ahead of Trump's Wednesday deadline, while Treasury Secretary Scott Bessent indicated that some countries lacking a trade agreement by then will have the option of a three-week extension. Bessent also signaled that letters Trump plans to send to nations this week aren't the final word on immediate tariff rates.

China hit back at European Union restrictions on its medical-device makers while maintaining key exceptions, adding uncertainty to ties ahead of a high-stakes summit this month. With tensions mounting, leaders meeting in Beijing in 2 1/2 weeks may clash on other thorny issues, including EU tariffs on Chinese electric vehicles and Beijing's support for Moscow's war on Ukraine.

Trump blasted Elon Musk's bid to found a political party as the intensifying feud between the former allies deepens investor concerns over the implications for Tesla and other companies led by the world's richest man. Musk said Saturday that a new "America Party" he has threatened to launch "is formed," a day after Trump signed a tax and spending bill that Musk had energetically denounced.

The UK government talked down hopes that a two-child cap on parental benefits might be scrapped, as Prime Minister Keir Starmer seeks to hold the line on spending after failing to push through separate controversial welfare cuts. Starmer is caught between a significant faction of his Labour Party that last week revolted in Parliament against the welfare reductions and global investors worried about rising government debt loads.

Trump hopes to put Israel and Hamas on a path to ending the war in Gaza this week, but his proposed 60-day ceasefire, which he'll discuss today with Israeli Prime Minister Benjamin Netanyahu in Washington, faces hurdles tied to troop redeployments and civilian relief. Meanwhile, multiple small vessels attacked a ship in the Red Sea near Yemen's Al Hudaydah port, prompting the crew to abandon ship before the Israeli air force struck Houthi-controlled ports in Yemen.

South African President Cyril Ramaphosa faces a fresh government crisis after a senior police official accused a cabinet minister of interference in an investigation into political assassinations.

Thailand's government will withdraw a controversial bill to legalize casinos following mounting public opposition and a fresh bout of political turmoil that has cut the ruling coalition's parliamentary majority.

Turkey launched an investigation into the main opposition party's leader and arrested more of its mayors, in a widening crackdown that's likely to stoke investor anxiety over risks to the rule of law and political stability.

As Mexican courts embrace a new era following the nation's first-ever election of judges, the Supreme Court's incoming chief, Hugo Aguilar Ortiz, told us that one of his priorities will be to ensure fairness across the board — and that includes company tax obligations. Check out the interview here.

Aguilar at his office in Mexico City last week. Photographer: Stephania Corpi/Bloomberg

On the latest episode of the Trumponomics podcast, we explore the potential for collateral damage from the president's immigration crackdown and whether there will be an upside in the longer term for US-born workers. Listen on Apple, Spotify, or wherever you get your podcasts.

Sign up for the Washington Edition newsletter for news from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television.

Chart of the Day

Japanese real wages dropped by the most since September 2023 as inflation continued to outpace salary growth, posing a growing problem for Prime Minister Shigeru Ishiba ahead of a July 20 election for the upper house of parliament. Ishiba, who is under pressure to alleviate the cost-of-living squeeze, has pledged cash handouts to households, while opposition parties are calling for a first-ever cut to sales tax. Japan's super-long bonds declined today amid concern the upper-house vote will trigger expanded government spending.

And Finally

Walk down the aisles of a Trader Joe's or Whole Foods Market in the US and chances are many of the piles of oranges and lemons will be labeled "Produce of South Africa." They have become a staple for the world's largest citrus importer — especially during the off-season summer months when in the southern hemisphere the winter harvest is at its peak. But now a potential tariff of about 30% that Trump has said will go into effect on July 9 threatens supplies from the top exporter of the fruits after Spain.

South Africa's citrus farmers are in a rush to get their produce to the US ahead of Trump's tariff deadline. Photographer: Dwayne Senior/Bloomberg

Thanks to the 27 people who answered Friday's quiz and congratulations to Kay Schroer, who was the first to correctly name Thailand as the country where the suspended prime minister was sworn in as a minister to allow her to attend cabinet meetings while awaiting the outcome of a court review of her alleged misconduct.

More from Bloomberg

  • Check out our Bloomberg Investigates film series about untold stories and unraveled mysteries
  • Next China for dispatches from Beijing on where China stands now — and where it's going next
  • Next Africa, a twice-weekly newsletter on where the continent stands now — and where it's headed
  • Economics Daily for what the changing landscape means for policymakers, investors and you
  • Green Daily for the latest in climate news, zero-emission tech and green finance
  • Explore more newsletters at Bloomberg.com
Follow Us

Like getting this newsletter? Subscribe to Bloomberg.com for unlimited access to trusted, data-driven journalism and subscriber-only insights.

Want to sponsor this newsletter? Get in touch here.

You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. If a friend forwarded you this message, sign up here to get it in your inbox.
Unsubscribe
Bloomberg.com
Contact Us
Bloomberg L.P.
731 Lexington Avenue,
New York, NY 10022
Ads Powered By Liveintent Ad Choices

No comments

Powered by Blogger.