- Trump threatened with an additional 10% tariff on countries perceived to align with BRICS
- US tariff threats and resolving stock equity sell-offs have fueled crypto demand, and as yields drop and the dollar weakens, Bitcoin and other cryptocurrencies often see gains
- Beijing warned that unilateral tariff actions undermine multilateral trade rules and could destabilize the global trading system
The Trump administration is preparing to notify countries of new tariffs ahead of a July 9 deadline, a move that includes a threat of an additional 10% tariff on nations perceived to be aligning with the BRICS economic bloc.
The BRICS bloc, which includes emerging economic powers like China, India, Russia, South Africa, and others, condemned the move as ‘unilateralism’ while also indicating a firm resolve to lessen their reliance on the US dollar.
With tariffs looming, global equity futures have dipped, sovereign bonds are in demand, and oil markets exhibit volatility – all of it with a potential impact on the crypto market.
A flight to hard assets
Generally speaking, the crypto industry benefits from equity outflows, as Bitcoin recently climbed to about $110k, very close to its all-time high. Ethereum, Solana, and XRP also posted gains, likely due to investors shifting capital from risk assets ahead of potential trade unrest.
US tariff threats and resolving stock equity sell-offs have fueled crypto demand, and as yields drop and the dollar weakens, Bitcoin and other cryptocurrencies often see gains.
Also, discussions on central bank digital currencies (CBDCs) in BRICS nations signal a macro shift. Since these countries strive for technological financial independence, crypto-native currencies may gain greater legitimacy and integration.
Still, BRICS’ move to reduce reliance on the dollar and possibly create a bloc-wide alternate payment network (or currency) creates opportunity, but it can also create volatility in crypto.
China’s response to Trump’s BRICS tariff threat
Chinese officials emphasized that BRICS has no intention of targeting or creating confrontation with any specific nation. Rather, it’s a grouping meant to encourage multipolar cooperation.
Beijing warned that unilateral tariff actions undermine multilateral trade rules and could destabilize the global trading system. The country reaffirmed its support for equal dialogue and respect, inviting negotiations while rejecting ‘economic bullying’.
The BRICS bloc currently consists of ten nations: Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates. Over the weekend, the BRICS group convened its 17th summit in Brazil.
All in all, geopolitical fragmentation can lead to crypto adoption, especially among nations exploring dollar alternatives. However, things are rather unstable at the moment, and we’ll likely have a better picture once Trump’s tariff deadline passes and other countries react to it, the BRICS group included.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
