BRICS and G20 In Trump 2.0
· Though the BRICS summit ended with a joint communique, Trump 2.0 policies are stopping a unified counter to the U.S. or the West. The December G20 summit at Trump’s Doral golf course in Florida is also likely to see the G20 papering over the cracks at a global level. Regional agreements will however remain, but perhaps only grow modestly. However, Trump’s adventures will likely be curtailed by the November mid-terms and the ongoing Iran saga.
The BRICS summit at least agreed a joint communique including voicing concerns over tariffs. However, the internal differences remain within the BRICS. India and to a degree Brazil are against an anti U.S. stance among BRICS, while momentum towards a BRICS trade block or shared currency is low. Most BRICS members want a slice of the U.S. import pie and do not want to upset the U.S.. They also understand that their economies differ. This is not just a question of GDP per capita and stage of economic development, but also natural resources; comparative advantage; strategic industries and economic/state interaction causing differences and making common goals difficult. BRICS did try to lean into ending the Iran/U.S. war, but Pakistan/Qatar and Turkiye remain at the forefront of trying to reach a 2nd ceasefire deal and improving shipping through the Straits of Hormuz rather than BRICS.
The G20 meet December 14-15 at Trump National Doral Miami, which will likely see all world leaders gathering. However, hopes are low of substantive agreements, both as Trump has little interest for new international agreements and also as all U.S. foreign policy is shaped by what is good for the Trump administration domestically. Pressure to end the Iran/U.S. war is driven by a desire to get diesel and gasoline prices lower for U.S. voters. President Xi is respected by Trump, but Trump wants to keep trade and strategic tensions with China to soothe U.S. manufacturing fears and keep pressure on U.S. companies to stay ahead of China in the AI race. The G20 remains a shadow of it’s glory days after the GFC.
Regional alliance on specific issues will remain solid and could grow. The EU wants to protect its economic interests, but knows it has to use NATO to build European centric military muscle should Trump not come to the rescue in an emergency in 2027-28. Asia and Middle East countries will lean towards more intra country trade, but falling short of formal trading blocs. Latam will try to get more trade deals that diversify trade from the U.S., but progress will depend on election outcomes in Brazil (October 2026) and Argentina (October 2027).
Nevertheless, Trump will likely be less adventurous in 2027 than 2026. The Iran war has gone badly in economic and political terms. While our baseline is for a 2nd ceasefire Q4 2026/Q1 2027 (here), we attach a 40% probability to intermittent hostilities throughout 2027. This will stop Trump’s military adventures elsewhere, though Cuba remains economically unstable. On the tariff front, USTR Greer will likely propose some additional country 301 tariffs (here), but these will likely be targeted rather than broad. The outcome of the Senate race is also important, with the betting odds close in contrast to a widely expected victory for the Democrats in the House. Losing the Senate could see GOP members distancing themselves from Trump before 2028.