Trump’s 'Blunder of the Century': Tariffs on China backfire as Beijing gains $1.2 trillion in historic BRICS surge

When US President Donald Trump, under the banner of "America First," declared a trade war on China a year ago, analysts predicted severe trouble for Beijing. However, the persistent Xi Jinping managed to solidify relationships with alternative markets, leading to a paradoxical situation. Despite pressure from the US, China recorded a record positive trade balance. According to recent data for 2025, the surplus of the world’s second-largest economy amounted to $1.2 trillion, with a monthly foreign exchange inflow of $100 billion—the highest levels in the country’s history—while the international use of the yuan continues to expand steadily.

Diplomatic ties severed elsewhere…

As US policy strained relations with its allies, Beijing focused on strengthening contacts with proven partners, including Ottawa and Delhi. The European Union holds particular significance: beyond the leaders of continental Europe, Xi’s influence even reaches the UK administration, traditionally considered a loyal US ally. British Prime Minister Keir Starmer’s four-day official visit to Beijing will be the first by a British PM since 2018. In January, Canadian Prime Minister Mark Carney visited China for the first time since 2017, signing a bilateral agreement to remove trade barriers and upgrade relations, describing China as a "more predictable and reliable partner."

A shift in partners

Despite a 20% decrease in China's exports to the US last year, shipments to Africa increased by 25.8%, to Southeast Asia by 13.4%, to the EU by 8.4%, and to Latin America by 7.4%. With China's economic power estimated at $20 trillion and securities capitalization at $45 trillion, the country has become a key partner for many governments due to its stability and rational leadership. China has now managed to turn the yuan into a credible international means of payment, with over half of cross-border transactions now conducted in yuan, while approximately half of foreign loans from Chinese banks are also yuan-denominated. The impact of this strategy is not limited to China; countries that previously viewed the nation with suspicion now actively seek cooperation.

An old rivalry

The two economic superpowers—the US and China—have been in confrontation for decades, but Trump's second term has exacerbated trade and technological tensions. Despite high tariffs imposed by Washington on Chinese products, China invested in expanding emerging markets and strengthening domestic production, a strategy considered fundamental for the CCP. China's economy achieved 5% growth in 2025, attracted foreign investors, and launched pilot projects in Beijing and Shanghai aimed at market access in telecommunications, healthcare, and education. The financial market rebounded from the trade war's effects, with the Shanghai Composite index rising by 27%, outperforming American stock exchanges. By mid-December 2025, monthly inflows reached $100.1 billion, pushing foreign exchange reserves to a ten-year high of $3.36 trillion.

The role of currency

The expansion of the yuan's international use is evident. Many global banking groups are increasing yuan liquidity and creating rapid payment systems across Southeast Asian, Middle Eastern, and European trade networks. China, through careful and steady planning, is succeeding in transforming the yuan into an international payment medium, with cross-border transactions in the currency now exceeding 50%. The reaction from the West, and specifically the US, has been one of concern. US political analysts are struggling to interpret China's success, citing the risks of cooperation due to sanctions and human rights issues. Despite these reservations, reality shows that China is increasingly becoming an "indispensable player" in international trade.

Global power shift - BRICS make history with $1 trillion in trade transactions

At the same time, the BRICS trade circuit reached an unprecedented milestone in 2025, exceeding $1 trillion, signaling a transformative shift in how global trade operates. This historic performance highlights the growing influence of the bloc as BRICS economic growth accelerates through strategic expansion and the deepening of trade relations between its members. The figures reflect years of cooperation between Brazil, Russia, India, China, and South Africa, as well as the newest members who recently joined the alliance. Experts see this record as a result of unique economic complementarity and strategic integration. This development has been described as a "historic event that changes the balance of power in the world," according to reports from TV BRICS. The impact of the BRICS expansion became evident with the inclusion of new members—such as the UAE, Ethiopia, Iran, and Egypt. Brazilian President Luiz Inácio Lula da Silva emphasized the importance of the bloc's performance at the BRICS Business Forum: "In 2025, based on the latest available data, intra-BRICS trade reached approximately $1 trillion, representing 20% of total exports and 30% of the bloc's total imports. Consequently, strengthening cooperation is considered essential for promoting productive integration."

Member contributions

China remains the dominant force in the bloc, accounting for approximately 64% of total exports and maintaining a strategic leadership position in many key sectors. India marked milestones, with total foreign trade reaching $825.25 billion for the fiscal year. Russia saw bilateral trade with China exceed $200 billion for the third consecutive year in 2025, while its trade transactions with the BRICS bloc reached approximately $399 billion by late 2024. These individual contributions pushed total BRICS trade past the trillion-dollar threshold, setting critical new benchmarks.

BRICS vs G7: The shift of global power

The comparison between BRICS and G7 economies shows widening differences in growth and economic dynamics. The BRICS+ share of global GDP based on purchasing power parity reached approximately 39.2% at the end of 2025, surpassing the steadily declining share of the G7. Economists forecast a growth rate of about 3.8% for BRICS in 2025—more than triple the projected 1.1% for the G7. President Lula also pointed out that emerging economies must support the multilateral trade system and promote the reform of the international financial architecture, emphasizing that BRICS "continues to function as a guarantor of a promising future."

Growth prospects and future influence

The historic $1 trillion milestone is not just about trade numbers; it reflects a fundamental restructuring of international economic relations and established trade patterns. The expansion of BRICS also affects sectors such as logistics infrastructure, the development of the digital economy, and regional connectivity initiatives. The gap between BRICS and G7 performance is expected to widen further by 2028, with forecasts showing a continuous increase in the BRICS trade cycle. The bloc now represents about 45% of the world's population and controls over 40% of global oil production following its 2024 expansion. With the further integration of new members, BRICS' influence on international trade is expected to grow significantly in the coming years.

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