Trade Issues Between the United States, the European Union and BRICS

Trade has become the main battlefield of international politics. The United States is imposing tariffs to protect domestic industries, the European Union is responding with its own industrial policies, while BRICS is expanding economic cooperation and reducing its reliance on the US dollar. What was once a rules-based trading system is increasingly shaped by economic competition and strategic interests.

These developments are changing the way countries trade, invest and compete. Rather than examining every aspect of international commerce, this article focuses on five trade issues that now dominate relations between the United States, the European Union and BRICS: the return of American protectionism, the dispute over Chinese electric vehicles, competition for critical minerals, BRICS’ de-dollarization efforts and growing industrial competition across the Atlantic.

These issues matter because they are already influencing investment decisions, supply chains and the future direction of the global economy. According to the World Trade Organization, world merchandise trade grew by 2.9% in 2024, but the organization also warned that geopolitical tensions, rising trade restrictions and industrial subsidies are increasingly reshaping global commerce. At the same time, the International Monetary Fund has noted that economic fragmentation could reduce global output over the long term if countries continue to divide into competing economic blocs. Against this background, trade is no longer simply about buying and selling goods, it has become a tool of economic security, industrial policy and geopolitical influence.

1.  US Tariffs and the Return of Protectionism

 The most significant trade issue between the United States, the European Union and BRICS is the return of protectionist trade policies under President Donald Trump’s second administration. Since taking office, President Trump has argued that previous trade arrangements allowed foreign economies to benefit at the expense of American workers and industries. His response has been to expand tariffs and make them a central instrument of US trade policy.

The new measures target a wide range of imports, including steel, aluminium, automobiles and manufactured goods from several trading partners. China remains the primary focus, but the policy has also affected the European Union and prompted warnings that additional tariffs could be imposed on BRICS countries if they pursue policies considered harmful to US economic interests, particularly efforts to reduce the role of the US dollar in international trade.

According to the World Trade Organization, trade restrictions among major economies have increased steadily in recent years, reflecting a broader shift towards economic security and domestic industrial protection. The International Monetary Fund has similarly observed that governments are increasingly using trade policy to strengthen strategic industries rather than simply promote free trade. This marks a significant departure from the trade liberalization that characterized much of the post-Cold War period.

Supporters of the policy argue that higher tariffs encourage companies to manufacture in the United States, create jobs and reduce dependence on foreign supply chains. Critics, however, contend that tariffs increase production costs, raise consumer prices and encourage trading partners to adopt retaliatory measures. The European Union has repeatedly warned that escalating tariffs risk disrupting global supply chains, while China has responded with its own trade restrictions on selected American products.

The return of protectionism therefore represents more than a disagreement over customs duties. It reflects a broader change in the purpose of trade policy. Instead of focusing primarily on expanding international commerce, governments are increasingly using tariffs to protect domestic industries, strengthen economic resilience and pursue geopolitical objectives.

2.  The Electric Vehicle Dispute

Electric vehicles have become one of the most contested products in global trade. As countries race to lead the transition to clean energy, competition is no longer limited to producing better cars but also to controlling the industries that will shape the future economy.

The dispute centers on Chinese electric vehicle manufacturers, including BYD, SAIC and Geely. The European Commission argues that these companies have benefited from extensive state support, allowing them to export electric vehicles at prices that European manufacturers struggle to match. Following an anti-subsidy investigation, the European Union imposed additional duties on Chinese electric vehicles in 2024, arguing that the measures were necessary to restore fair competition in the European market.

The United States has adopted an even tougher position. In 2024, Washington announced a significant increase in tariffs on Chinese electric vehicles, stating that government- supported production and industrial overcapacity threaten American manufacturers and could undermine domestic investment in clean technologies. Although the European Union and the United States have taken different approaches, both share concerns about the rapid expansion of Chinese electric vehicle exports.

China rejects these accusations, maintaining that the competitiveness of its electric vehicle industry is the result of innovation, technological development and efficient supply chains rather than unfair trade practices. Beijing has criticized both American tariffs and European anti-subsidy measures, arguing that they violate the principles of free trade and risk slowing the global transition to cleaner transportation.

The electric vehicle dispute illustrates a broader shift in international trade. Governments are no longer competing only to sell products abroad; they are competing to lead the industries of the future. As countries increasingly protect sectors considered strategically important, trade policy is becoming an instrument of industrial and technological competition rather than simply a means of promoting international commerce.

3.  Critical Minerals and the Race for Strategic Resources

Another major trade issue concerns access to critical minerals. As the global economy shifts towards electric vehicles, renewable energy and advanced technologies, demand for minerals such as lithium, cobalt, nickel, graphite and rare earth elements has increased rapidly. These resources are essential for producing batteries, semiconductors and other technologies that will drive future economic growth.

Although critical minerals are extracted in many parts of the world, China has built a dominant position in refining and processing them. According to the International Energy Agency (IEA), China processes around 60% of the world’s lithium and approximately 90% of rare earth elements, making it an indispensable part of global clean energy supply chains. This has given Beijing significant influence over industries that are central to the green transition.

The United States and the European Union have responded by reducing their dependence on Chinese supply chains. Washington has invested in domestic mining and strengthened partnerships with countries such as Australia and Canada through the Minerals Security Partnership. Meanwhile, the European Union adopted the Critical Raw Materials Act, which aims to diversify suppliers and ensure that no single country dominates Europe’s access to strategic resources.

For BRICS, critical minerals represent both an economic opportunity and a strategic advantage. Countries such as China, Brazil and South Africa possess significant reserves of minerals needed for modern technologies, while new BRICS members further strengthen the bloc’s access to energy and natural resources. This allows BRICS to play an increasingly important role in global supply chains at a time when demand for these materials continues to grow.

The competition for critical minerals demonstrates that trade is no longer limited to finished products. Increasingly, it is about securing the resources needed to manufacture the technologies of the future. Countries that control these supply chains are likely to enjoy greater economic influence in the decades ahead.

4.  BRICS and the Push for De-dollarization

Another issue reshaping global trade is BRICS’ effort to reduce dependence on the US dollar. For decades, most international trade particularly in energy and commodities has been settled in dollars, giving the United States a central role in the global financial system.

The push for de-dollarization accelerated after Western sanctions were imposed on Russia following the invasion of Ukraine. Concerned about their exposure to the Western

financial system, several BRICS members began expanding trade in local currencies. China and Russia now conduct most of their bilateral trade in Renminbi and Rubles, while Brazil and China have introduced direct currency settlement arrangements to facilitate trade without using the US dollar.

For BRICS, this is largely an effort to reduce transaction costs, strengthen financial resilience and limit vulnerability to future sanctions. For Washington, however, it represents a strategic challenge. The US dollar remains the world’s principal reserve currency, accounting for nearly 58% of global foreign exchange reserves, according to the International Monetary Fund. Its widespread use in international trade gives the United States considerable economic influence, particularly through the global payments system and financial sanctions.

The European Union has adopted a more cautious approach. While supporting the existing international financial system, Brussels has also promoted a stronger international role for the euro as part of its broader strategy to increase Europe’s economic resilience and reduce excessive dependence on any single currency.

Although the US dollar remains dominant, BRICS’ initiatives show that international trade is gradually becoming more diversified. The debate is therefore no longer about replacing the dollar immediately, but about whether the future global trading system will rely on a single dominant currency or a more multipolar financial framework.

Conclusion

The trade issues between the United States, the European Union and BRICS demonstrate that the global trading system is undergoing a fundamental transformation. Competition is no longer centered on reducing tariffs or expanding free trade. Instead, governments are increasingly competing over industrial leadership, technological innovation, strategic resources and financial influence.

For the United States, trade policy has become a tool for protecting domestic industries and preserving the international role of the US dollar. The European Union is responding by strengthening its own industrial competitiveness while attempting to maintain an open and rules-based trading system. At the same time, BRICS is gradually building alternative economic partnerships that reduce dependence on traditional Western financial and trade institutions.

These competing approaches do not necessarily signal the end of globalization. But they do suggest that the era of a single, universally accepted model of international trade is fading. The future of global commerce is likely to be defined by multiple centers of economic power. Where trade policy increasingly reflects strategic interests as much as economic priorities. How these major actors manage their differences will not only shape their own prosperity but also determine the stability of the international trading system in the years ahead.

References

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European Commission. (2024). Critical Raw Materials Act. https://commission.europa.eu

European Commission. (2025). The Clean Industrial Deal. https://commission.europa.eu

European Parliament Research Service. (2024). EU–US trade relations and industrial policy after the Inflation Reduction Act. https://www.europarl.europa.eu

International Energy Agency. (2024). Global Critical Minerals Outlook 2024. https://www.iea.org

International Monetary Fund. (2025). World Economic Outlook 2025. https://www.imf.org

Organisation for Economic Co-operation and Development. (2024). Industrial policy and international trade. https://www.oecd.org

The White House. (2022). Inflation Reduction Act Guidebook. https://www.whitehouse.gov

United Nations Conference on Trade and Development. (2024). Trade and Development Report 2024. https://unctad.org

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BRICS Information Portal. (2024). BRICS Joint Declaration of the Kazan Summit. https://infobrics.org

European Council on Foreign Relations. (2025). Europe between Washington and Beijing: Economic security in a multipolar world. https://ecfr.eu

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