BRICS leaders concluded their summit in New Delhi with a renewed push to expand trade in local currencies, signaling a coordinated effort to reduce reliance on the U.S. dollar. The bloc also finalized the New Delhi Declaration, a joint statement outlining reforms to modernize global financial systems.
BRICS advances local currency trade agenda
South African President Cyril Ramaphosa called for greater use of local currencies, stronger cross-border payment systems, and deeper financial interconnectivity among member states. Energy-rich economies such as Iran and Russia—both facing U.S. sanctions limiting dollar-based trade—urged the bloc to develop alternative payment, settlement, and depository infrastructure. Iranian President Masoud Pezeshkian stated that the current financial system is "vulnerable to political shocks due to its concentration on a limited number of currencies," emphasizing the need for diversification.
U.S. responds with economic leverage threats
In response to BRICS efforts to challenge dollar dominance, former U.S. President Donald Trump warned that any country attempting to replace the dollar in global trade would face a 100% tariff, backed by a 10% baseline tariff. Trump framed BRICS as "anti-American" and described the bloc’s actions as a direct challenge to U.S. economic influence.
Challenges to de-dollarization efforts
Despite the push for local currency trade, experts cited significant hurdles, including lack of financial and macroeconomic integration, trade imbalances, and deep distrust between key members such as China and India. Data from the Bank for International Settlements shows the U.S. dollar remains dominant in forex markets, accounting for 89% of transactions as of April—up 1 percentage point from the previous year. The euro and yen held 29% and 17% shares, respectively.
Internal divisions within BRICS
Reports highlighted friction among member states, particularly between Iran and the UAE, over regional conflicts. Negotiators reportedly worked "down to the wire" to finalize the New Delhi Declaration, underscoring the bloc’s ability to unite despite internal disagreements. Indian Prime Minister Narendra Modi stated that "the changing world cannot be steered by outdated institutions. Reforms are essential."
Global financial system implications
The BRICS summit underscored a broader debate over the future of the global financial system, with some experts questioning whether the bloc can achieve meaningful de-dollarization given structural economic and political barriers. Meanwhile, U.S. officials have framed the push as a geopolitical challenge requiring a strong economic response to maintain dollar dominance.