India, China, Brazil and Russia are building exits from American coercion, but none has accepted the domestic cost of constructing a shared monetary order.
At Bharat Mandapam in New Delhi, officials preparing the 18th BRICS Leaders’ Summit closed central-government offices for September 11 and reserved the next two days for delegations representing eleven member states. The presidency’s theme promised resilience, innovation, cooperation and sustainability. The language was broad enough to hold climate finance, artificial intelligence, institutional reform, health, trade and security, but three days before the summit it still contained no public commitment to a common currency, no binding schedule for a shared settlement system, and no balance sheet capable of absorbing the savings now held in dollars.
That absence is the summit’s central fact. BRICS can condemn unilateral sanctions, settle more bilateral trade in national currencies, connect domestic payment networks and lend through the New Development Bank. It can also represent almost half the world’s population and a large share of its output. None of those achievements answers the reserve-currency question: where does a central bank place hundreds of billions of liquid assets, which market can receive an oil exporter’s surplus without trapping the money, and which institution supplies emergency liquidity when a war closes a shipping lane and everyone needs the same currency at once?
The dollar answers those questions through institutions built over eight decades. BRICS answers them through pilots, technical reports and bilateral arrangements. That distance shows that summits cannot substitute for capital markets, political trust and a state willing to run the deficits that provide the rest of the world with safe assets. The members want protection from American power and they want the commercial benefits of the system that carries it, and yet none has offered to bear the full cost of replacing what Washington owns.
China’s Surplus Cannot Become the World’s Reserve
China entered 2026 with the productive capacity closest to an alternative pole and the monetary structure least suited to performing that role. Its goods surplus reached about $1.19 trillion in 2025 as exports rose and domestic demand remained weak. The IMF’s February Article IV assessment estimated a current-account surplus of 3.3 per cent of GDP, headline inflation at zero and growth slowing from 5 per cent in 2025 to 4.5 per cent in 2026. Those figures describe export power. They also describe why Beijing cannot freely supply the world with renminbi assets.
A reserve issuer must provide foreigners with something they can hold in vast quantities and sell immediately without political permission or a large loss. The United States supplies Treasury securities because it runs external deficits, maintains open capital markets and accepts foreign ownership of dollar claims. China runs the opposite machine. It exports more goods than it imports, manages cross-border capital, intervenes in the exchange rate and protects a financial system still carrying property-sector losses and weak household demand. Opening that system far enough to internationalise the renminbi would reduce Beijing’s control over capital flight, credit allocation and the currency, which are three powers the Communist Party has shown no intention of surrendering.
The contradiction begins with the surplus. Chinese exporters receive dollars, euros and other currencies. They can retain them, sell them to banks for renminbi or invest abroad. If the central bank prevents rapid appreciation to protect export competitiveness, the state and banking system accumulate foreign claims. China can encourage an Iranian or Russian seller to accept renminbi for oil, but the seller must then spend those renminbi on Chinese goods, invest them in Chinese assets or exchange them for another currency. China’s surplus limits the first route, capital controls weaken the second, and the third returns demand to the currencies the transaction was supposed to bypass.
CIPS processes cross-border renminbi payments, reduces dependence on Western financial messaging and gives sanctioned states an operational channel they badly need, but it cannot absorb the accumulated reserves of central banks and commodity exporters. Its transaction value rose sharply during the Hormuz crisis as energy trade shifted routes and currencies. The dollar’s advantage lies in the combined depth of Treasury markets, commodity pricing, trade finance, bank funding and Federal Reserve liquidity; counting CIPS messages against SWIFT messages confuses a payment rail with the monetary system moving across it.
The war exposed both Chinese preparation and Chinese dependence. Beijing had spent two decades expanding strategic reserves, Central Asian pipelines, the Myanmar oil route, Russian gas links, domestic production and renewable generation. That redundancy kept a near-closure of Hormuz from becoming a national supply collapse. It did not prevent Chinese refiners from cutting throughput, drawing inventories and competing more aggressively for Russian barrels, nor did it stop the oil shock from reaching manufacturers already operating against weak consumption. In July, China’s National Bureau of Statistics reported crude processing down 15.8 per cent from a year earlier while retail sales rose only 0.6 per cent. High-technology manufacturing grew rapidly and integrated-circuit output rose 20.7 per cent, and yet the domestic economy absorbing those goods remained too weak to replace export demand.
China therefore faces a choice that no summit language can dissolve. It can preserve control, the trade surplus and the managed financial system, or it can open a market large and trusted enough for foreign states to treat renminbi claims as reserves. Beijing can move gradually between those positions. It cannot fully occupy both.
India Signed the Commitment and Bought the Oil
India demonstrates why a shared BRICS monetary order remains politically distant. The country wants cheaper transactions, less exposure to sanctions and a larger international role for the rupee. It does not want a renminbi zone, open-ended obligations to Russia, or the loss of access to American consumers, technology and finance. Strategic autonomy is therefore less a fixed alignment than a continuous auction among dependencies.
Washington forced the auction into public view. The February trade framework lowered the reciprocal American tariff on Indian goods to 18 per cent, removed the additional 25 per cent Russian-oil penalty and recorded an Indian intention to purchase $500 billion in American products over five years. India agreed to reduce duties on a range of American industrial and agricultural goods. The White House said New Delhi had committed to stop importing Russian oil. Indian officials spoke instead of commercial procurement and energy security, preserving enough ambiguity to act differently when physical supply required it.
Hormuz settled the argument. Russian oil had fallen to about 1.1 million barrels a day in January, the lowest level since late 2022. After West Asian supplies were choked, India imported about 2.7 million barrels a day from Russia in June and a record 2.78 million in July. August deliveries fell to around 2.1 million because Russian exports contracted and Chinese buyers competed for cargoes, not because India had implemented the promised withdrawal. Washington had secured a written commitment, India had secured tariff relief, and when the barrel became scarce the cargo moved according to need.
This does not make India the architect of a BRICS alternative. It shows why India will block any architecture that converts Chinese economic weight into Chinese monetary authority. The rupee is not fully convertible, Indian bond markets cannot absorb the world’s reserve portfolios, and New Delhi’s payment diplomacy favours interoperability among national systems rather than a supranational currency. The same government can expand UPI links, invoice selected trade in rupees, buy sanctioned crude and sign a vast purchase plan with Washington because each transaction preserves room for manoeuvre. A common monetary order would reduce it.
The summit will therefore confront an Indian veto that is rarely stated as one. Russia needs an alternative because sanctions made dollar dependence intolerable. China would gain strategic influence from wider renminbi use. India wants neither Russian urgency nor Chinese primacy. Consensus rules allow New Delhi to call that restraint.
Brazil Diversified Without Leaving the Dollar
Brazil under President Luiz Inácio Lula da Silva supplied much of the political language behind de-dollarisation. Lula asked why trade between Brazil and China required the dollar and supported local-currency settlement. Brazil also used its 2025 BRICS presidency to pursue cross-border payment discussions. The official record was more careful than the rhetoric: Brazilian sherpa Maurício Lyrio said a common BRICS currency was not under discussion, and the Rio Declaration asked finance ministers and central-bank governors to continue examining payment interoperability.
That distinction matters. Reducing the dollar’s use in a bilateral invoice is an attainable administrative decision. Replacing the dollar as the asset held after settlement requires a common market, common legal expectations and a common answer to financial crisis. Brazil offered none of those because it had no reason to trade one dependency for another.
Trump’s Brazil order illustrated the danger Lula was describing. The United States imposed additional duties to punish the conduct of Brazil’s judiciary and its treatment of American technology firms. Brazil answered with sovereignty language, deeper China trade and the long-delayed EU-Mercosur agreement. The interim trade accord was signed in Asunción on January 17, 2026 and provisionally applied from May 1, creating a commercial area of more than 700 million people. It diversified Brazil’s access to markets, but it did so through European legal and financial infrastructure, with euro and dollar markets still available behind the transaction.
Brazil’s choice was rational. A state seeking autonomy gains little by exchanging American coercion for Chinese coercion on worse institutional terms. It builds overlapping relationships so no partner can close every door, strengthening Brazil’s bargaining position while weakening any BRICS project that requires exclusive monetary commitment. Multipolar diplomacy grows without creating a unified financial pole.
Russia Built the Exit Nobody Voluntarily Chose
Russia has travelled furthest from the dollar because it was pushed hardest. Asset freezes, sanctions on banks and exclusion from parts of SWIFT forced Moscow to expand settlement in roubles and renminbi, build SPFS and accept the costs of thin liquidity, delayed payments and dependence on Chinese institutions. Russian officials say roughly 90 per cent of trade with BRICS partners is now settled in national currencies. The claim is credible for large parts of Russia-China commerce but cannot be independently audited across every partner from the aggregate figures Moscow publishes.
Sanctions-driven substitution proves that trade can continue without dollars. It does not prove that countries with a choice will adopt the same channels. Iran accepts renminbi because sanctions close alternatives. Russia holds and spends more renminbi because Western reserves and settlement routes became unsafe. Brazil, India, South Africa and the Gulf states retain access to dollar markets and therefore compare the liquidity, convertibility and political cost of every alternative. The system Russia built for survival does not become attractive by surviving.
The summer oil trade made Russia indispensable to India even after Washington extracted a promise to exclude it. That strengthened Moscow’s position while exposing the narrow base of Russian power. India bought record volumes because Hormuz failed, and when Russian exports dropped by roughly 720,000 barrels a day over four weeks in August, Indian supply tightened again. A monetary pole cannot rest on emergency cargoes from a sanctioned producer whose output and shipping routes are under continuous pressure.
President Vladimir Putin’s statement at Kazan in 2024 that Russia was not seeking to abandon the dollar was therefore less a retreat than an admission of scale. Moscow can reduce its own exposure. It cannot manufacture the trust, assets and convertibility required for the rest of the world to do the same.
The Gulf Wants Every Option at Once
The United Arab Emirates and Saudi Arabia complicate the BRICS story because their capital matters more than their summit language. Abu Dhabi manages enormous pools of sovereign wealth through institutions integrated with American, European and Asian markets. The dirham remains pegged to the dollar. Saudi Arabia sells more oil to China, has explored renminbi settlement and joined the expanded BRICS formation, but the Public Investment Fund holds large Western assets and Riyadh still seeks American security commitments, weapons and technology.
Neither state needs ideological consistency. Gulf rulers can settle a portion of Chinese trade in renminbi, invest in American companies, borrow in dollars, cooperate with Russia through OPEC+, and use BRICS membership to improve the terms offered by Washington. That is multipolar portfolio management, not departure from the dollar. The distinction is easy to miss because the photograph of a summit records membership while a sovereign-wealth balance sheet records allegiance in several currencies at once.
South Africa occupies the other end of the capacity problem. It supports reform of international institutions and greater local-currency use, but weak growth, high unemployment and severe domestic infrastructure demands leave Pretoria little capital for constructing a new global financial system. The New Development Bank offers a useful channel for project lending and has expanded its membership, and yet even that institution borrows in established markets, lends in several currencies and manages its credit rating inside the financial order BRICS says it wants to change.
Washington Does Not Need BRICS to Collapse
The American strategy is often tested against an imaginary final objective: the disappearance of BRICS, the permanent isolation of China, or the surrender of every state that trades with Russia and Iran. Failure to produce those outcomes is then offered as proof that the administration has no strategy. Its own documents describe a more practical aim. Washington wants to keep the decisive parts of global production, finance, technology and security organised around American institutions, and it can achieve that while BRICS expands its membership, holds summits and conducts a growing share of bilateral trade in local currencies.
The distinction between replacement and containment explains the apparent contradictions. The United States can tolerate a renminbi payment between China and Russia if the exporter later needs dollar liquidity, maritime insurance, a Western correspondent bank or access to a market where the asset can be sold without restriction. It can tolerate an Indian rupee account if India’s largest technology firms still need American chips and its exporters still negotiate under the threat of American duties. It can tolerate Saudi discussion of oil sales in renminbi if the riyal remains pegged to the dollar and the kingdom’s security and sovereign-wealth relationships remain tied to the United States. Washington does not have to stop every alternative transaction. It has to keep the alternative from becoming a complete system.
The administration’s 2025 National Security Strategy treats trade with China, strategic supply chains, advanced technology and defence production as parts of the same contest. The January 2025 trade memorandum distributed assignments across the State, Treasury, Defence, Commerce and Homeland Security departments. The April trade report then called for the full federal government to preserve American economic, technological and military dominance. Those are not the documents of officials who believe tariffs end at the port. They describe an architecture in which a customs duty can support a semiconductor restriction, an investment review can support a military supply chain, and market access can purchase foreign alignment.
Treasury operates the financial section of that architecture. Its sanctions can designate a shipowner, trader, bank, insurer or individual far from the United States because access to dollar clearing and American counterparties gives the order reach beyond American territory. In May 2026, Treasury’s Economic Fury action targeted Iranian oil networks and warned that any person or vessel assisting covert commodity trade risked sanctions. It joined those designations to the administration’s maximum-pressure order and a State Department reward of up to $15 million for information that disrupted the Islamic Revolutionary Guard Corps’ financial mechanisms. The official announcement described an enforcement campaign. For a third-country company, it presented a choice between one sanctioned trade and the financial network through which it conducted the rest of its business.
This is where the world pain acquires administrative form. It appears in a compliance officer refusing a lawful transaction because the sanctions risk is too high, in a shipping premium charged before a tanker enters a threatened route, in a central bank holding additional dollars because it cannot trust next month’s access, and in a government buying dearer oil to protect its exporters from an American penalty. No American official must order each outcome. The network distributes the instruction.
The strategy also exploits differences among the BRICS members. China wants wider use of the renminbi but retains capital controls. India wants autonomy from sanctions but resists Chinese monetary leadership. Russia needs immediate escape routes that other states regard as dangerous. Brazil wants political room without sacrificing Western finance. The Gulf monarchies want Chinese trade and American protection. Washington negotiates with each state separately because bilateral pressure keeps those differences active, while a multilateral alternative would require the members to resolve them.
India’s February agreement demonstrates the method. Washington left India’s BRICS membership and diplomatic relations with Moscow untouched while securing tariff reductions, planned purchases worth $500 billion, commitments on American energy and technology, and a stated end to Russian oil imports. The Hormuz crisis later forced India back towards Russian barrels, showing the limit of the concession while leaving India’s American market exposure and the threat of renewed penalties intact. Washington gained influence over the choice even when it failed to dictate the final cargo.
Brazil’s EU agreement also fits the strategy’s tolerable range. European integration reduces Brazil’s dependence on the United States, but it does not create a BRICS reserve asset or a payment system independent of Western law and finance. The diversification can even fragment the political coalition required for a single alternative, because Brazil must now satisfy European standards, Chinese commodity demand, American commercial pressure and Mercosur interests at the same time. A country with four negotiating tables has less capacity to build a fifth institution from the ground up.
The administration therefore does not need to be omniscient, and the failures are real. The Supreme Court found its principal emergency-tariff authority unlawful. American firms paid duties and then sought refunds. Higher import costs reached American households. The Iran war produced an Indian turn towards Russian oil that contradicted the February pledge. Every one of those facts belongs in the assessment. None converts the interagency programme into random behaviour, because the programme continued through other statutes, sanctions, export controls and bilateral agreements after individual measures failed.
For BRICS, the danger is delay rather than ceremonial defeat. A cross-border payment pilot can spend years reconciling technical standards, capital controls, data rules and sanctions exposure. During those years, a tariff threat forces the finance ministry into negotiations with USTR, an oil shock consumes reserves, and a domestic election makes the transfer of monetary authority politically impossible. Washington can lose individual contests while preserving the timetable that favours the incumbent system.
The Global South pays during that delay as governments hold additional precautionary dollars, firms carry compliance and conversion costs across parallel systems, and consumers absorb fuel and food shocks when war crosses a shipping lane. American policymakers describe many of those outcomes as unintended consequences. The public record does not establish that officials individually planned each price increase, while the published strategy does show that the administration proceeded after international institutions had documented the likely external costs of tariffs, sanctions and energy disruption.
The Dollar Is Strongest During the Crisis It Helps Create
The dollar’s reserve share has fallen from around 71 per cent in 2000 to 57.13 per cent in the first quarter of 2026. That is a long decline, but the beneficiaries have included the euro and a group of smaller reserve currencies rather than one replacement controlled by the Global South. The renminbi remains constrained by Chinese policy. Gold has gained importance in official portfolios, but gold cannot clear an invoice, finance a shipment or supply emergency bank funding without conversion into a currency and a legal claim.
The first quarter’s rise in the dollar share was driven partly by exchange-rate valuation, not a rush by central banks to endorse Washington. That qualification does not weaken the structural point. When conflict raises energy prices and market fear, the dollar can appreciate, dollar assets become more valuable in reserve portfolios, and importers need more dollars to buy the same fuel. A political decision taken in Washington can strengthen the currency through which its foreign cost is paid.
BRICS has identified the vulnerability correctly. The Rio Declaration supported local-currency finance, payment-system interoperability, a revised Contingent Reserve Arrangement and work through the New Development Bank. These are serious institutional projects. They remain separate pieces because the members disagree over the currency, the governing institution, the allocation of losses and the amount of sovereignty each state must transfer. Everyone wants insurance against exclusion. Nobody wants the insurer to be Beijing.
The IMF’s September 2026 analysis of Asian currency diversification supplies a useful measure of the distance. More than 80 per cent of trade invoicing and nearly 85 per cent of foreign-exchange settlement in the ASEAN+3 economies still use dollars, as do roughly two-thirds of official reserves and more than half of regional banks’ cross-border assets and liabilities. Asian governments are building additional clearing and settlement routes beside that system. They are reducing the damage a single exclusion can cause rather than preparing one currency to replace the dollar across every function.
That layered approach may prove more durable than a common-currency announcement. A Chinese importer can pay in renminbi, an Indian exporter can receive rupees through a linked payment platform, and both central banks can retain dollars as the liquidity backstop. The arrangement reduces transaction exposure without requiring India to hold Chinese financial assets on Beijing’s terms. It also limits the political symbolism Washington can attach to de-dollarisation because each new channel can be described as commercial redundancy. The trade-off is speed: parallel routes distribute risk, but they do not concentrate the capital needed to build a rival reserve market.
The World This Economic War Is Building
The likely destination is a divided economy rather than a clean transfer from one hegemon to another. The dollar retains the deepest reserve market and the principal emergency-liquidity network, while China, India, Russia, Brazil and their partners build additional settlement routes around the points where Washington can deny access. Trade continues across the divide through costlier chains of intermediaries, currencies and insurers. Governments hold more reserves, duplicate infrastructure and choose suppliers partly for political safety, accepting lower efficiency to reduce the risk that one foreign order can stop a payment or shipment.
Industrial policy will move further inside national security. Washington’s published programme already joins tariffs to semiconductors, defence production, investment screening, energy and supply chains. China answers through domestic technology, commodity stockpiles, state credit and wider renminbi use. India and Brazil seek manufacturing investment from competing blocs without accepting exclusive alignment. The result is a world with more factories built for redundancy, more subsidies directed by governments, and fewer commercial decisions made on price alone.
Energy importers will remain the most exposed states in that transition. A new tariff can be revised by executive order and a payment can be rerouted through another bank, but an oil deficit must be filled every day. Countries without strategic reserves or domestic production will continue to pay through weaker currencies, higher food and transport prices, emergency subsidies and debt. The United States, China, Russia and the Gulf producers possess different buffers; much of Africa and South Asia does not. That unequal capacity will decide which governments can maintain autonomy when the next route closes.
BRICS is therefore heading towards a layered financial network, with more trade invoiced in national currencies and more regional payment connections operating beside a dollar system that remains the final liquidity backstop. The transition reduces Washington’s ability to isolate a large economy completely, but it also increases transaction costs and leaves smaller states navigating several incompatible regimes. A company may settle one invoice in renminbi, borrow in dollars, insure the cargo in London and comply with sanctions written in Washington. Multipolarity arrives first as administrative duplication.
Washington’s strategy carries risks for the system it is defending. The Supreme Court’s rejection of IEEPA tariffs showed that executive economic power faces domestic legal limits. India’s record Russian purchases showed that physical necessity can defeat a written concession. Brazil’s European agreement showed that pressure raises the value of alternative markets, and Iran’s control of Hormuz showed that military superiority does not guarantee command of a waterway through which the adversary can price the world’s energy. Each use of American power protects the existing hierarchy for the immediate negotiation while giving foreign governments another reason to invest in routes outside it.
The pace will be uneven. No summit can manufacture the trust, open capital markets and shared loss mechanism required for a common reserve currency, and the dollar’s network advantages will not disappear because a bilateral oil cargo changes denomination. The same record shows a steady accumulation of alternatives whose purpose is narrower and more attainable: ensuring that trade continues when Washington closes one door. The coming order will remain dollar-centred, more regional, more expensive and harder to govern.
The unresolved issue is who absorbs the cost during the long overlap. Major powers can finance duplicate systems, subsidise strategic industries and compel trading partners to choose. Smaller import-dependent states must purchase energy, service foreign debt and protect household consumption while those systems compete around them. They did not design the economic war and they possess the least influence over its settlement, and yet their currencies, wages and public budgets will continue to carry its daily arithmetic.