
The end of cheap everything?
After decades of cheap everything, a new economic order is emerging where the old world of unquestioned abundance is over. In the third part of our five-article series, we explore how this...
by Simon J. Evenett Published August 5, 2025 in Geopolitics • 7 min read
In the past six months, the US government has systematically antagonized every major emerging economy. Tariff threats against Brazil, India, and South Africa were repeated and elevated in late July 2025. Add China and Russia to the list, and America has now targeted all five original BRICS nations – home to more than 3.2 billion people.
Many executives, particularly those outside the US, dismiss these developments as political theatre. European and Asian business leaders often view American trade threats as distant noise, irrelevant to their operations. This is a miscalculation that could prove catastrophically expensive.
Here’s why: America increasingly demands that trading partners align not just on economics, but on foreign policy and national security matters. Today’s tariff threat against India becomes tomorrow’s pressure on the EU and Switzerland to follow suit. What happens when Washington demands that its acquiescent allies – the EU, Japan, Korea – impose their own restrictions on Indian goods? Your “safe” European operations suddenly face the same compliance nightmare as American rivals.
For corporate executives worldwide, this isn’t just geopolitical drama – it’s a shift in the global business environment that cannot be ignored.
India may be in the firing line this week and last, but American actions have a greater reach.
Consider the ripple effects that companies may not have mapped. India and Russia have cooperated on military and foreign policy matters for 75 years. Today, India purchases substantial Russian oil, refines it, and exports some to American allies in Europe. President Trump’s very recent threat to impose large tariffs on the $80-90bn of goods India exports to the US targets this relationship. But the real impact extends far beyond direct India-US trade.
Here’s how the cascading risk can unfold for non-American companies. As Washington extends its definition of national security to encompass foreign policy alignment, allied governments face mounting pressure to mirror American trade restrictions. For example, last year, Canada slapped 100% tariffs on Chinese electric vehicles after Washington DC did, and pressure was applied by American diplomats. For their part, European firms operating in India today may get caught up in any copycat EU trade restrictions imposed on India and in New Delhi’s inevitable retaliation.
Moreover, your technology company’s “Indian vendor” likely sources components globally. Your pharmaceutical division’s active ingredients may trace back through multiple BRICS countries and could become subject to retaliatory export restrictions. Your consulting firm’s Delhi office serves clients across Southeast Asia. When trade tensions escalate, these interconnected relationships become corporate vulnerabilities.
India may be in the firing line this week and last, but American actions have a greater reach. Once again, the US has conditioned its trade policy on non-economic objectives – foreign and security policy with India, domestic political factors in Brazil and South Africa, and the contest for global primacy with China (which is the defining geopolitical contest of this age). These steps by the Trump Administration represent interference in foreign nations that America itself would never accept if the roles were reversed.
“Smartphones are its largest export to the US, but does anyone seriously believe America is the only market buying smartphones?”
Here’s what makes this particularly dangerous for business: unlike the EU, Korea, Japan, and the UK – whose defense-related dependencies tip the policy calculus in Brussels, Seoul, Tokyo, and London in favor of acquiescence to US pressure – the BRICS have alternatives. They’re not captive markets waiting for American terms.
Take India as an example. Smartphones are its largest export to the US, but does anyone seriously believe America is the only market buying smartphones? Next come diamonds, then medicines, then light oil – all products in global demand. Only one-sixth of India’s goods exports go to the US. For India, access to the American market isn’t existentially critical – it’s one option among many.
This changes the entire negotiating dynamic. When the US threatens tariffs, BRICS nations can credibly walk away and find other trading partners. Recently, South Africa was hit with 30% import taxes by the US. This sounds bad – until one realizes that only 9% of South Africa’s exports are destined for the US, and a chunk of that is exempted. Certainly, firms operating in South Africa don’t need this disruption, but the threat is hardly existential. Endlessly repeating the mantra that the US “has the best cards” in the negotiation game doesn’t make it true.
When the US simultaneously antagonizes all major alternative power centers, it pushes them toward each other
The systemic question facing executives is whether BRICS will become to American unilateralism what Waterloo was to Napoleon – an unexpected coalition that ended an era of dominance. Together, BRICS nations represent 40% of the global population and 25% of global GDP. Moreover, tentatively, the building blocks are being laid. They’re building alternative payment systems, trade arrangements, and economic institutions. Until now, BRICS countries have not acted decisively in concert. But that could change.
When the US simultaneously antagonizes all major alternative power centers, it pushes them toward each other. China’s threat to American primacy has already driven trade policies that backfired spectacularly. Now, similar approaches are being applied to India, Brazil, and South Africa – creating a coalition of convenience that could fundamentally reshape the rules of global commerce. Don’t forget that each of the BRICS has concerns with the rules-based commercial order that America erected after the Second World War (and that Washington DC has done so much to dismantle this century).
The speed of these developments compounds the challenge. Six months ago, comprehensive BRICS tariff threats seemed like throwaway oddball remarks confined to a US Presidential campaign. Today, they’re repeated and wrapped up in a wholesale review of US trade policy reality. This compressed timeline means traditional risk management approaches – gradual assessment, careful planning, measured response – no longer suffice.
For corporate executives worldwide, four realities demand immediate attention:
The sobering reality is that coherent grand strategy appears absent from current US approaches to BRICS nations.
A critical caveat: President Trump’s threats may represent negotiating tactics rather than settled policy. Each BRICS nation presents different strategic considerations, and bilateral deals remain possible. But what if they’re not? What if this represents a genuine shift toward confronting alternative power centers simultaneously?
The sobering reality is that coherent grand strategy appears absent from current US approaches to BRICS nations. This creates maximum uncertainty for business planning worldwide. Without clear objectives or enduring deals, companies – American, European, and Asian alike – face a world where trade relationships can shift based on social media posts and allied governments scramble to align with American demands.
Forward-looking executives worldwide are already hedging. They’re building supply chain flexibility, cultivating BRICS market relationships independent of US positions, and preparing for scenarios where allied governments demand alignment with American trade restrictions. European firms are particularly vulnerable – caught between growing BRICS markets and potential EU compliance requirements driven by Washington’s demands. The question isn’t whether Presidential social media posts matter to your business – it’s whether you’ll adapt sufficiently to the new realities they’re creating. In a world of 3.2 billion potential customers across BRICS nations, the cost of miscalculation grows daily, and the luxury of geographic distance from American policy disputes is rapidly disappearing.
Where is the 21st-century Congress of Vienna – an effort to rebuild global order on new terms? Until that emerges, executives must navigate an increasingly fragmented world where today’s tweets become tomorrow’s trade barriers. The companies that thrive will be those that recognize this shift early and manage the emergent deep uncertainty accordingly. The era of assuming American economic dominance provides stable business conditions is ending. The question is whether your team is ready for what comes next.
Professor of Geopolitics and Strategy at IMD
Simon J. Evenett is Professor of Geopolitics and Strategy at IMD and a leading expert on trade, investment, and global business dynamics. With nearly 30 years of experience, he has advised executives and guided students in navigating significant shifts in the global economy. In 2023, he was appointed Co-Chair of the World Economic Forum’s Global Future Council on Trade and Investment.
Evenett founded the St Gallen Endowment for Prosperity Through Trade, which oversees key initiatives like the Global Trade Alert and Digital Policy Alert. His research focuses on trade policy, geopolitical rivalry, and industrial policy, with over 250 publications. He has held academic positions at the University of St. Gallen, Oxford University, and Johns Hopkins University.
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