Trump is oblivious to the fact that BRICS is now a bigger economy than the G7. The US is no longer an essential part of the global economy.
Increasing trade outside of the dollar is the only way countries can protect themselves from economic coercion by the US. In particular, China can obviously see that the US will go after them the same way they did with Russia. So, it would be suicide to agree to tie their global trade to the dollar.
Meanwhile, China also happens to be a bigger trade partner than the US for most of the world. So if it comes to choosing between the US and China, it's not really much of a choice. Especially given that China exports things people actually need, while the US barely has any manufacturing industry left accounting for less than 15% of the overall economy. The US is a big market, but it's not essential the way China is.
I like to think that your analysis of the situation is the case but I'm becoming increasingly doubtful about the commitment of BRICS nations to overthrow the special privilege of the US Dollar. From my perspective too many of the parties involved rely on USD trade for their wealth and status. It seems to me like too many players in this alliance are economically bound by USD and are not interested at least right now in trading off short term material gains for potential bigger gains in the future by subverting USD trade.
It appears to me that the gains in multipolar non USD trade have been offset by the US Fed play to raise interest rates to suck dollars into treasury assets and then flood them back out into periphery economies since 2022 or so. I still have much to learn about MMT and economics in general but I'm certainly not as optimistic now about dedollarization now as I was 2-3 years ago.
That being said I think the overall trend of periphery economies orienting around China is right, and I think it will come down to that nations economic policy as the driving factor of whether or not BRICS can succeed in their stated objectives and tear down the USD dominated global economy.
Basically, I think that China has no choice but to keep dedollarizing. If they don't then it's just going to be worse for them when the US starts stealing their foreign assets, cutting them out of SWIFT, and so on. They have to do it on their terms while they have leverage. Given that China has to dedollarize, they cannot possibly accept Trump's demand to stop trading outside the dollar.
China will say we're happy to keep trading in dollars, but it's our business if we want to use other currencies. At that point the US has to decide whether they start putting 100% tariffs on China and countries trading with China. If they do, then the US economy is likely gonna crash cause prices on everything will shoot through the roof overnight. On top of that, countries will be forced to pick whether trade with China or trade with US is more essential to them.
I think it's likely that Trump is bluffing, and the US walks it back when China says no, but you never know. I do think that the economic war with Russia gives us some idea of what to expect. The US pulled the trigger on trying to cut Russia out, and we see that major countries like China and India did not fall in line. At that point the whole scheme collapsed. Trying to cut China out of world trade is even more absurd in my opinion, and putting 100% tariff would be tantamount to that.
That’s my impression as well. I think it’s mostly bravado for the audience. Maybe he also thinks it’s the art of the deal in his ½D chess brain.
Dependency Theory can help explain: the periphery doesn't rely on USD, they are dependent on it. USD can only maintain wealth and status for compradores at the expense of national development, for the nation this dependency is a factor of underdevelopment and unequal exchange. USD dependency doesn't serve the national interests of any BRICS nation or even the financial interests of any national bourgeoisie. It only serves the compradores, who benefit from their special status as agents of imperialism.
Completely agree with what you have said, I guess my fear is that the compradors will influence economic policy in these countries to a degree that will undermine the dedollarization initiative at least in the short term. I'm totally with you in thinking that long term its against the material interests of BRICS nations to do this but I guess I have been taken off guard by some recent developments in this area and it has made me doubtful. Perhaps also the bad news this week in Syria and such has just put in a pessimistic mood.
Luckily, American policy puts an immense strain on dollar hegemony. For example, Russian compradors didn't want to antagonize the West, but were forced into it, when the alternative was slowly losing their wealth and status.