As the leaders of BRICS member states gathered in Brazil for the bloc’s 17th annual summit this week, Washington threatened to levy a 10-percent tariff on countries aligning with what the Trump administration calls “anti-American” policies.
Among the attendees at the two-day event in Rio De Janeiro was Ethiopian Prime Minister Abiy Ahmed (PhD), in what was his second summit since his country officially joined the organization alongside four other countries in January 2024.
The move drew mixed reactions, with one side viewing Ethiopia’s accession to a bloc that purports to stand as a counterweight to Western dominance in global affairs as a welcome development, and the other warning it could place the country in an awkward position, stuck between East and West.
Among the latter were hundreds of Ethiopian economists who participated in a survey conducted in the weeks following Ethiopia’s accession, warning that joining BRICS would likely trigger backlash from the West.
A year and a half later, Trump’s punitive tariff threat gives credence to their warning.
“Any Country aligning themselves with the Anti-American policies of BRICS will be charged an ADDITIONAL 10% Tariff [sic],” the US President wrote in a social media post. “There will be no exceptions to this policy. Thank you for your attention to this matter!”
Today, analysts say that if implemented, Trump’s latest tariff would weigh more heavily on economic underdogs like Ethiopia than on other, more developed BRICS members such as China. Although the tariff would be paid by American importers and would not affect Ethiopian businesses directly, the added cost could push US businesses to look for alternatives.
Exports to the US bring in around USD 400 million annually, primarily made up of coffee, apparel, and textiles.
Others question what Ethiopia really stands to gain from BRICS, pointing to the obvious political, economic, and geographic differences between its members.
Proponents argue the bloc, which now encompasses 56 percent of the world’s population and 44 percent of global GDP – this estimate accounts for both member countries and those aligned as partners – can offer Ethiopia benefits in security, trade, and financing. The New Development Bank (NDB), a multilateral financial institution founded by BRICS members a decade ago, and its efforts towards de-dollarization play a key role in making the case for Ethiopia’s membership.
Speaking anonymously, a credible source in the know of the issue at hand told The Reporter that although the officials who accompanied the Prime Minister to Rio did not make mention of it upon their return from the summit, the Ethiopian delegation used the platform to lobby for access to financing from NDB.
Each of the five founding BRICS members (Brazil, Russia, India, China, and South Africa) has an equal shareholding in the bank, which operates with USD 100 billion in authorized capital. Headquartered in Shanghai, NDB provides both sovereign (government-backed) and private loans with a focus on financing sustainable infrastructure, climate change mitigation and adaptation, and local currency financing.
The source told The Reporter the Ethiopian government is keen on opening a line of credit with the bank, with officials viewing it as an opportunity to access financing without the painful austerity measures and economic policy obligations that come with funding from sources like the International Monetary Fund (IMF).
However, experts like Abdulmenan Mohammed, a financial analyst keeping a close watch on Ethiopian economic policy, argue the newfound hope in NDB is misplaced.
“I don’t think BRICS will be very beneficial [for Ethiopia]. I don’t think BRICS will serve as an alternative source of financing for Ethiopia because Ethiopia’s overall economic framework is still heavily reliant on Western institutions,” said Abdulmenan.
The expert observes NDB, formerly known as the BRICS Bank, holds little influence compared to institutions like the World Bank and the IMF.
“I don’t think it will significantly benefit Ethiopia. In fact, I don’t see major benefits even for countries like Russia and China, let alone for a developing country like Ethiopia,” Abdulmenan said.
He joined in the voices of many critics who point to BRICS’ Achilles’ heel: BRICS is less homogenous geographically, economically, as well as in terms of policy priorities and global allegiances, unlike other trading and security groupings such as the EU.
Abdulmenan points out that Ethiopia enjoys stronger trade and investment relations with individual BRICS countries such as China, Saudi Arabia, and India than with BRICS as a group.
He argues that Ethiopia should be working towards establishing special agreements with BRICS countries to gain benefits similar to those provided by the African Growth and Opportunity Act (AGOA)—a duty-free trade privilege Ethiopia lost under the Joe Biden administration for rights violations committed during the two-year northern war.
“We have not seen Ethiopia being able to use its BRICS membership to offset the diplomatic and economic benefits and privileges it has been denied from the West,” Abdulmenan said, adding the latest summit dwelt more on politics; reforming traditional global financial institutions, and resolving global conflicts, among other issues of concern.
A number of leaders who attended called for a more balanced, fairer global order.
“Alongside fellow BRICS leaders at this year’s summit in Rio Di Janeiro. Together, we continue to strengthen our partnership in pursuit of a more equitable and just world. The BRICS platform remains vital in advancing shared development and global cooperation,” reads an X post from PM Abiy under a group photo. The Prime Minister took the opportunity also to give his Green Legacy initiative more international recognition and traction and shared it as one of best practices in ‘glocal’ environment protection and conservation endeavors.
Malaysian Prime Minister Anwar Ibrahim was quoted as saying that the BRICS grouping represented an opportunity to shape a more balanced and just international order, calling also for the reformation of what he described as legacy international organizations to reflect changing global realities.
“I also call for a major overhaul of global institutions such as the United Nations, the International Monetary Fund, the World Bank, and the World Trade Organization, to better reflect current realities and the needs of developing countries, rather than remaining trapped in outdated post-World War II structures,” he said.
Speaking at Westminster Abbey as part of his state visit to the UK on July 8, French President Emmanuel Macron drew a clear picture of what the Western world deemed desirable in relation to the maintenance of multilateralism.
In his wide-ranging speech, Macron told British lawmakers: “As permanent members of the United Nations Security Council, deeply committed to multilateralism, the United Kingdom and France must once again show the world that our alliance can make all the difference. Clearly, we have to work together… to protect the international order as we fought (for) it after the Second World War.”
The French President’s statements delineate the future of multilateralism as seen through the lens of the West.
In a declaration they issued upon the summit’s conclusion, the BRICS countries called for a more balanced and fairer global world order with a reformed United Nations and its decision making organ, the Security Council.
The declaration entitled “Strengthening Global South Cooperation for More Inclusive and Sustainable Governance” is said to have reflected “months of intense coordination, with over 200 meetings held and 200 new cooperation mechanisms created or reinforced in areas such as eradicating hunger, tackling climate change, and developing emerging technologies.”
It reads: “We want to reaffirm our commitment to the BRICS spirit of mutual respect and understanding, sovereign equality, solidarity, democracy, openness, inclusion, collaboration and consensus. Building upon the past 17 BRICS Summits, we are now extending our commitment to strengthening cooperation within the expanded BRICS, based on three pillars of cooperation: politics and security, economy and finance, and cultural and people-to-people cooperation.
“We are also enhancing our strategic partnership to benefit our peoples by promoting peace, a fairer and more representative international order, a revitalized and reformed multilateral system, sustainable development, and inclusive growth.”
Although in their declaration the members also call for increased participation in the bloc of developing countries, particularly those in Africa, analysts say not all the founding members are in total agreement as to the timing and extent of future expansion of membership with the grouping.
China is a major proponent of expansion, aiming to increase its global influence. Other members like South Africa and Russia also support expansion, while India and Brazil initially had reservations.
Some members, like India and Brazil, are concerned about diluting their influence and prefer to reform the existing international order rather than create a counter-bloc. There are also fundamental tensions between those who want to challenge the Western-led order and those who seek to reform it from within, according to analysts and observers.
A blog authored by Maiva D’Auria and published on BRICS webpage reads: “One of the pillars of the declaration is its commitment to addressing ongoing conflicts in various parts of the world, and the current polarization and fragmentation of the international order. The leaders expressed concern over the current trend of sharply rising global military expenditures at the expense of the adequate financing for the development of emerging countries.
“They advocate for a multilateral approach that respects diverse national perspectives and positions on crucial global issues, including sustainable development, hunger and poverty eradication, and global climate action….”
-BRICS Genesis-
The acronym BRIC was conceived in 2001 by an economist from the Goldman Sachs investment bank in recognition of the dynamic economic growth of Brasil, Russia, India, and China, information posted on BRICS website shows. As a cooperation and concertation forum, the BRIC was created by the political initiative of the governments of its founding countries. Its initial goal was to engage in dialog about the major themes in the international agenda and politically strengthen their common stances in order to democratize, legitimize, and balance the global order.
The first BRICS meeting occurred at the Ministers of Foreign Affairs level in 2006, at the margins of the United Nations General Assembly in New York. The first meeting of the Summit of Heads of State was held in 2009 in the city of Ekaterinburg, Russia.
As of the 2008 financial crisis, the then four countries began to act in a concerted manner in the context of the G20, the International Monetary Fund (IMF), and the World Bank, presenting proposals to reform the international economic and financial governance to reflect the increased relative weight of emerging countries in the global economy.
With the incorporation of South Africa in 2011, an “S” was added to the original acronym for the group’s first expansion. In 2023, during the Johannesburg Summit, the second expansion was defined, with the adhesion of six new members.
*Samuel Abate contributed to this article
