Why the U.S. and Allies See BRICS as a Threat: Implications for Global Power and Supply Chains

Rafael A. Vela / Jan 22, 2025

The BRICS bloc — originally composed of Brazil, Russia, India, China, and South Africa — is undergoing a transformation that has captured global attention. With its recent expansion to include Saudi Arabia, Iran, the UAE, Argentina, Egypt, and Ethiopia, the bloc now represents a significant portion of the world's population, resources, and GDP. For the United States, this growing alliance is more than just a diplomatic challenge — it threatens the economic foundations of Western dominance, particularly in global trade, finance, and supply chains.

From reducing reliance on the U.S. dollar to controlling critical resources, BRICS is positioning itself as a counterweight to the U.S.-led global order. For global supply chains, this shift could bring both opportunities and disruptions, reshaping everything from raw material sourcing to trade routes and logistics networks.

The Challenge to U.S. Dollar Dominance

A key reason the U.S. sees BRICS as a threat is the bloc's push to reduce dependency on the U.S. dollar in global trade. For decades, the dollar's status as the world’s reserve currency has given the U.S. unmatched economic leverage. Countries that trade in dollars rely on the U.S. financial system, allowing the U.S. to impose sanctions and control global financial flows.

However, BRICS members are increasingly seeking alternative payment systems. This shift threatens the petrodollar system — the practice of trading oil in dollars — which has long been a pillar of U.S. economic power. The inclusion of Saudi Arabia and the UAE, both major oil producers, in BRICS is especially concerning for Washington. If these countries agree to sell oil in non-dollar currencies, it could significantly weaken the dollar's dominance.

For global supply chains, a de-dollarized trade environment would have profound implications.

• Companies would need to adjust to new payment structures, potentially increasing transaction costs.
• Financial risks would rise as businesses grapple with currency volatility and new trade regulations imposed by emerging markets.
• Countries might favor BRICS-aligned trading partners, making it harder for Western companies to access critical raw materials and markets.

Global Supply Chain Implications of BRICS Resource Control

A growing concern for the U.S. is BRICS' control over critical natural resources. With its expanded membership, BRICS now includes some of the world’s largest producers of oil, gas, minerals, and agricultural commodities. This resource dominance could disrupt global supply chains, particularly those dependent on energy transition materials and food supplies.

Consider the following:

• Russia is a major supplier of natural gas and fertilizers, critical for energy production and agriculture.
• Saudi Arabia and Iran are energy giants that control significant portions of the global oil supply.
• Brazil and Argentina are agricultural powerhouses, producing soybeans, beef, and corn that feed much of the world.
• South Africa and Ethiopia are key players in mineral extraction, including gold, platinum, and rare earth elements.

By consolidating their influence over these resources, BRICS countries could reshape global supply chains, favoring their own alliances over traditional Western partners. This would have direct implications for industries like automotive, electronics, agriculture, and energy, which depend on these materials to sustain production.

Disrupting Trade Routes and Logistics Networks

The expansion of BRICS also signals a potential shift in global trade routes. The bloc's geographic reach now stretches across South America, Africa, the Middle East, and Asia, giving it strategic control over key logistics hubs and maritime routes.

For example:

• The Strait of Hormuz, controlled by Iran and the UAE, is a critical chokepoint for global oil shipments.
• The Suez Canal, in Egypt, remains one of the most vital maritime corridors for trade between Europe and Asia.
• South Africa’s ports play a crucial role in connecting trade flows between the Atlantic and Indian Oceans.

BRICS could leverage these strategic locations to redirect global supply chains, favoring non-Western trade routes. This could increase costs and transit times for companies relying on traditional Western-aligned logistics networks.

Additionally, logistical alignment between BRICS members could lead to the development of alternative infrastructure projects, such as railways, ports, and digital trade corridors, that bypass Western control altogether.

Technological Sovereignty and Supply Chains

BRICS countries are also focusing on reducing reliance on Western technology. China, India, and Russia are leading efforts to develop independent tech ecosystems, including semiconductors, digital currencies, and cybersecurity frameworks.

For supply chains, this trend has several implications:

1. Tech companies will need to diversify their supplier base, as reliance on Western chipmakers and software could become a liability in BRICS-aligned markets.
2. Businesses may face new compliance challenges, as countries adopt regional data standards and tech regulations outside the scope of Western policies.
3. The rise of alternative digital currencies could reshape cross-border payments, impacting supply chain financing and payment terms.

Undermining Western-Led Institutions

Another major concern for the U.S. is the erosion of influence in Western-led institutions like the IMF, World Bank, and WTO. BRICS has already established its own New Development Bank (NDB) to finance infrastructure projects in member countries, providing an alternative to Western financial institutions.

The NDB offers funding without the strict conditions imposed by the IMF and World Bank, making it attractive to developing countries. As BRICS expands its financial and trade partnerships, supply chains may shift toward BRICS-aligned markets, further marginalizing Western influence.

This realignment could affect:

• Access to financing for businesses in developing countries.
• Investment flows in key industries, particularly energy, agriculture, and manufacturing.
• The rules and standards governing international trade, potentially favoring non-Western practices.

The Future of Global Supply Chain Partnerships

The U.S. sees BRICS as a threat not just because of its geopolitical ambitions, but because of its potential to reshape global supply chain partnerships. The bloc's control over critical resources, trade routes, and financial systems could redirect global supply chains toward non-Western markets.

As BRICS continues to expand, businesses will need to adapt their supply chain strategies to account for:

• New sourcing options in BRICS countries.
• Alternative trade routes that bypass Western-aligned networks.
• Shifts in trade regulations that favor BRICS-aligned markets.

The rise of BRICS signals a multipolar world, where Western dominance in supply chains is no longer guaranteed.

Final Thoughts: A New Supply Chain Reality

The expansion of BRICS represents more than just a geopolitical shift — it’s a realignment of global supply chains. The bloc’s focus on de-dollarization, resource control, and alternative trade routes poses significant challenges to the U.S.-led global order.

For businesses, this shift means that traditional supply chain partnerships are becoming less reliable, and new opportunities are emerging in BRICS-aligned markets. Companies must adapt to this evolving landscape, ensuring they are prepared for a future where Western dominance in global trade is no longer the status quo.

The question now is whether the U.S. and its allies can reshape their own supply chain strategies fast enough to remain competitive in this new global order.

The rise of BRICS can be viewed as a long-overdue realignment of global power — one that allows historically marginalized or developing nations to assert more control over their economic futures and reduce dependency on Western-led systems. However, while this shift may bring greater balance to global trade, it’s important to acknowledge that the growing influence of BRICS also raises new challenges and complex risks for global supply chains.

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