Leaders of growing BRICS group gather for Rio summit
With forums such as the G7 and G20 groups of major economies hamstrung by divisions and the disruptive "America First" approach of US President Donald Trump, expansion of the BRICS has opened new space for diplomatic coordination.
"In the face of the resurgence of protectionism, it is up to emerging nations to defend the multilateral trade regime and reform the international financial architecture," Brazilian President Luiz Inacio Lula da Silva told a BRICS business forum on Saturday.
BRICS nations now represent over half the world's population and 40 per cent of its economic output, Lula noted.
The BRICS group gathered leaders from Brazil, Russia, India and China at its first summit in 2009. The bloc later added South Africa and last year included Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia and the United Arab Emirates as full members. This is the first leaders' summit to include Indonesia.
"The vacuum left by others ends up being filled almost instantly by the BRICS," said a Brazilian diplomat who asked not to be named. Although the G7 still concentrates vast power, the source added, "it doesn't have the predominance it once did".
However, there are questions about the shared goals of an increasingly heterogeneous BRICS group, which has grown to include regional rivals along with major emerging economies.
Stealing some thunder from this year's summit, Chinese President Xi Jinping chose to send his prime minister in his place. Russian President Vladimir Putin is attending online due to an arrest warrant from the International Criminal Court.
Still, many heads of state will gather for discussions at Rio's Museum of Modern Art on Sunday and Monday, including Indian Prime Minister Narendra Modi and South African President Cyril Ramaphosa.
GROWING CLOUT, COMPLEXITY
Brazil, which also hosts the United Nations climate summit in November, has seized on both gatherings to highlight how seriously developing nations are tackling climate change, while Trump has slammed the brakes on US climate initiatives.
Both China and the UAE signaled in meetings with Brazilian Finance Minister Fernando Haddad in Rio that they plan to invest in a proposed Tropical Forests Forever Facility, according to two sources with knowledge of the discussions about funding conservation of endangered forests around the world.
Expansion of the BRICS has added diplomatic weight to the gathering, which aspires to speak for developing nations across the Global South, strengthening calls for reforming global institutions such as the United Nations Security Council and the International Monetary Fund.
The growth of the bloc has also increased the challenges to reaching consensus on contentious geopolitical issues.
Ahead of the summit, negotiators struggled to find shared language for a joint statement about the bombardment of Gaza, the Israel-Iran conflict and a proposed reform of the Security Council, said two of the sources, who requested anonymity to speak openly.
To overcome differences among African nations regarding the continent's proposed representative to a reformed Security Council, the group agreed to endorse seats for Brazil and India while leaving open which country should represent Africa's interests, a person familiar with the talks told Reuters.
The BRICS will also continue their thinly veiled criticism of Trump's US tariff policy. At an April ministerial meeting, the bloc expressed concern about "unjustified unilateral protectionist measures, including the indiscriminate increase of reciprocal tariffs".
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
14 hours ago
- CNA
S&P 500 recedes from record highs as tariffs sour sentiment
NEW YORK: Wall Street ended lower on Friday (July 11), with Meta Platforms META.O weighing on the S&P 500 after President Donald Trump intensified his tariff offensive against Canada, amplifying the uncertainty swirling around US trade policy. Trump late on Thursday ramped up his tariff assault on Canada, saying the US would impose a 35% tariff on imports next month and planned to impose blanket tariffs of 15% or 20% on most other trading partners. The S&P 500 eased from a record high the day before, with caution prevailing after Trump on Thursday imposed 50% tariffs on Brazil and as the European Union braced for a possible letter from Trump with details on fresh tariffs. "The increased rhetoric around tariffs, what we've seen this week regarding Brazil and Canada, is certainly elevating the anxiety level," said Michael James, an equity sales trader at Rosenblatt Securities. "People had become a little more accustomed to the lack of negative tariff headlines, and we've kind of been reminded that the tariff picture is still there." Shares of Nvidia NVDA.O hit an intraday record high. Drone makers AeroVironment AVAV.O and Kratos Defense & Security Solutions KTOS.O jumped after US Defense Secretary Pete Hegseth ordered a surge in drone production and deployment. TARIFFS AFFECTING MAJOR US COMPANIES Investors will soon turn their attention to the second-quarter reporting season, with a focus on how Trump's on-again, off-again tariffs are affecting major US companies. Analysts on average expect S&P 500 companies to increase their second-quarter earnings by 5.7%, year over year, with big gains from tech companies and declining profits in energy, consumer staples and consumer discretionary, according to LSEG I/B/E/S. "We believe expectations are a bit low for S&P 500 earnings. Much of the second quarter was marked with tariff and trade issues, and that may have caused some dislocations in earnings," said Michael Landsberg, chief investment officer, Landsberg Bennett Private Wealth Management. Levi Strauss & Co. LEVI.N jumped after the apparel seller raised its annual revenue and profit forecasts and beat quarterly estimates. Meta Platforms fell after Reuters reported that the company is very unlikely to offer more changes to its pay-or-consent model, increasing the risk of fresh EU antitrust charges and hefty daily fines. Kraft Heinz KHC.O closed higher after the Wall Street Journal reported the company is preparing to break itself up as the packaged food maker grapples with persistent weakness in demand for its higher-priced brands.
CNA
14 hours ago
- CNA
Brazil downplays tariff impact as Trump says he will speak to Lula at some point
WASHINGTON/BRASILIA/SAO PAULO: Brazil's government on Friday (July 11) downplayed the impact of the 50% tariff US President Donald Trump threatened to impose on imports from that country, as leaders from both nations expressed a cautious willingness to negotiate in the future. Trump told reporters he might speak later to Brazil's President Luiz Inacio Lula da Silva, who earlier said he would seek a diplomatic solution but reciprocate like-for-like if the tariffs take effect on August 1 as promised. "Maybe at some point I'll talk to him. Right now I'm not," Trump said as he left the White House to visit flood-ravaged Texas, again criticising Brazil's legal proceedings against former right-wing President Jair Bolsonaro. Trump's remarks came as Lula told Record TV in an interview aired late on Thursday that "we'll first try to negotiate, but if there's no negotiation, the law of reciprocity will be put into practice." Brazil's government projected the tariffs will have little impact on its economic growth this year, which it expects to reach 2.5%, as only some specific manufacturing sectors would be hard hit. A White House official, who requested not to be named, told Reuters on Thursday that, because the new tariffs, including Brazil's, are an extension of the levies announced in April, energy products like oil and critical minerals would continue to be exempt. Oil is Brazil's top export to the United States, and, on Thursday, the Brazilian oil lobby group IBP remained uncertain if the exemption that benefited the commodity would continue. The US embassy in Brazil didn't immediately reply to a request for comment. The US is also a large importer of Brazilian steel products, pulp, coffee, orange juice and beef; goods that the government said could find other global buyers. "Given this scenario, the impact of the tariffs tends to be of little significance on 2025 growth, although some manufacturing sectors may be particularly affected," Brazil's Finance Ministry said in a report. Those include the aerospace industry, with the US accounting for a large chunk of planemaker Embraer's revenue, and energy-related machinery. "NOT LIKE WE CAN'T SURVIVE WITHOUT THE US" Lula had already vowed to find new buyers for Brazil's products, saying that "it is not like we cannot survive without the U.S." Economic Policy Secretary Guilherme Mello told reporters that even if "some" effects are felt on growth, they would not be as relevant as before, saying that Brazil managed to diversify its trade partners over the past two decades. But exporters were concerned about the impact of Trump's new tariffs. The head of Brazil's beef industry group ABIEC said the levies would make it "economically unfeasible" for the South American country to export beef to the US. Trump left few options for Brazil to respond when he linked the tariffs to the country's judiciary, launching legal proceedings against former leader Bolsonaro, who is on trial on charges of plotting a coup to stop Lula from taking office in 2023. Trump on Friday repeated his defence of Bolsonaro. "They're treating President Bolsonaro very unfairly," he said. In an interview with TV Globo, Lula said he found Trump's reasoning for the tariffs "extremely outrageous." Lula said he could not accept that Trump was calling for an end to proceedings against a man who "didn't just try to stage a coup. He tried to prepare my death."
CNA
14 hours ago
- CNA
Dollar strengthens against peers as Trump rekindles trade tensions; bitcoin hits record high
NEW YORK :The U.S. dollar rose against major currencies including the yen and euro as President Donald Trump rekindled trade tensions with new tariffs on Canada and other trading partners. Trump issued a letter late on Thursday that said a 35 per cent tariff rate on all imports from Canada would apply from August 1. The European Union was set to receive a letter by Friday. The U.S. president, whose global wave of tariffs has upended businesses and policymaking, floated a blanket 15 per cent or 20 per cent tariff rate on other countries, a step up from the current 10 per cent baseline rate. This week he surprised Brazil, which has a trade surplus with the United States, with duties of 50 per cent, and hit copper, pharmaceuticals and semiconductor chips. "There do appear to be some tariff jitters creeping in once again after Trump floating the blanket tariffs yesterday," Michael Brown, market analyst at online broker Pepperstone in London, said. "Overall the moves that we have seen in the FX space are relatively contained, and recent ranges seem to still be respected for the time being," he added. The U.S. dollar was up 0.79 per cent to 147.4 against the Japanese yen, on track to add nearly 2 per cent for the week - the biggest weekly gain since early December. It was flat against the Swiss franc at 0.79695 franc. The euro was 0.1 per cent lower at $1.1688, after Trump said the European Union could receive a letter on tariff rates by Friday, throwing into question the progress of Brussels' trade talks with Washington. Against the yen, the dollar was up 0.6 per cent to 147.05 yen. The Canadian dollar weakened against its U.S. counterpart and was down 0.11 per cent at C$1.3672, following a knee-jerk fall of more than 0.5 per cent after Trump unveiled the tariff rate. The Brazilian real was 0.26 per cent lower against the dollar. The market reaction to the slew of new tariffs has been largely muted compared to the manic sell-off that followed April's "Liberation Day" announcement, but investors remain on edge over the future of global trade and whether the August 1 deadline is final. While the resurgence of tariff worries was helping support the buck, some traders remained sceptical about the medium-term outlook for the U.S. currency which has come under severe selling pressure this year. "My base case remains for a slow but steady USD depreciation over the medium-term, but we have clearly already fallen a long way, in a short space of time, so there is scope for a bit of a rebound, especially if some of the more recent USD shorts begin to get squeezed," Pepperstone's Brown said. Also supporting the dollar were data suggesting labour market resilience and minutes from the Federal Reserve's latest policy meeting that tempered market expectations for imminent interest rate cuts. The dollar index is down nearly 10 per cent so far this year, on worries that data could soon reflect more widely the damage U.S. policies have had on the world's largest economy. It rose 0.28 per cent to 97.85, on track to notch a weekly gain and snap two consecutive weeks of losses. "USD/CAD has kept most of its gains after a meaningful knee-jerk rally on the announcement, but with those gains coming from the Dollar leg, with cross/CAD generally close to flat versus pre-announcement," Goldman Sachs analysts led by Stuart Jenkins said in an investor note. Elsewhere, sterling was down 0.54 per cent at a two-week low at $1.35050, as data showed Britain's economy contracted unexpectedly for a second month running in May. Cryptocurrencies saw a boost, driven by institutional investor demand and crypto-friendly U.S. policies. Bitcoin advanced 3.7 per cent and scaled yet another record high of $118,832, while ethereum jumped 5.9 per cent to $2,987.15 "The ... new record reflects the resilience of global risk appetite even in the face of Trump tariffs, as well as high optimism over U.S. legislative proposals," DBS FX and credit strategist Chang Wei Liang said.
