After years of deepening global interdependence, signs of economic and geopolitical fragmentation are increasingly evident. This shift began with the United Kingdom’s departure from the European Union (Brexit), coinciding roughly with the peak of global trade as a share of worldwide GDP. More recently, the BRICS alliance—comprising Brazil, Russia, India, China, and South Africa—has gained momentum as a counterweight to the long-dominant U.S.-led economic framework, while the United States shows growing tendencies toward economic and diplomatic retrenchment.
Despite the uncertainty surrounding these developments, objective metrics such as GDP, trade patterns, currency usage, and demographic trends offer insight into the balance of economic power.
The U.S. continues to lead in nominal GDP, projected at $29 trillion in 2024. The collective nominal GDP of the BRICS nations stands at approximately $27 trillion, a figure heavily influenced by China’s economic output. However, aggregate GDP figures mask underlying structural disparities.
BRICS economies, particularly China, rely heavily on exports, making them vulnerable to shifts in global demand. China’s industrial model depends on massive imports of raw materials:
Metals: It is the top global importer of iron ore, copper, aluminum, and nickel, essential for infrastructure and manufacturing.
Energy: China leads the world in crude oil imports.
Agriculture: It imports substantial volumes of soybeans, corn, wheat, and dairy products, resulting in a net food deficit.
As Western nations seek to diversify supply chains and reduce reliance on Chinese manufacturing, Beijing faces mounting pressure to secure new export markets and maintain stable access to critical commodities. This dual dependency poses long-term risks to its growth trajectory.
The U.S. dollar remains the cornerstone of global finance. As of 2022:
Approximately 58% of global foreign exchange reserves are held in USD.
Over 90% of forex transactions involve the dollar.
Around half of global trade is invoiced in dollars, despite the U.S. accounting for only 10% of global trade volume.
Notably, about 80% of dollar usage in international trade occurs between non-U.S. entities, highlighting its role as the default medium of exchange. Additionally, most cross-border loans and bonds are denominated in USD, even when issued by non-American parties.
Although BRICS members like China and Russia have pursued de-dollarization—such as settling bilateral trade in local currencies—they lack the depth of capital markets, institutional credibility, and liquidity needed to displace the dollar. Brazil’s central bank has acknowledged that no viable alternative to dollar-based financial systems currently exists within the bloc.
Demographics present another challenge for BRICS, especially China and Russia. China’s fertility rate has fallen to 1.3 births per woman, well below the 2.1 replacement level. Its working-age population is shrinking while the elderly population expands rapidly. By 2030, one in four Chinese citizens is expected to be over 60. A gender imbalance—29 million more males than females—further complicates family formation and social stability. These factors constrain consumer demand, labor supply, and productivity growth.
Rising labor costs due to a shrinking workforce threaten competitiveness in labor-intensive industries and increase fiscal burdens related to elder care. These conditions also hinder China’s transition from export-led growth to domestic consumption.
Russia faces comparable or worse demographic trends, including low birth rates and population aging. Reliable data is limited, but external analysts widely agree that demographic stagnation limits long-term economic potential.
In contrast, the U.S. benefits from a more favorable demographic outlook, bolstered by immigration and a balanced age structure, supporting sustained workforce growth and consumer demand.
While the BRICS coalition represents a potential challenge to U.S. economic leadership, its internal cohesion is weak and structural disadvantages are significant. The United States maintains advantages in per capita GDP, innovation, institutional resilience, demographic health, and financial system dominance.
Nonetheless, the U.S. must invest in reshoring manufacturing and reducing strategic dependencies on Chinese supply chains, particularly if geopolitical tensions escalate.
In the near term, the U.S. economy appears stronger than the BRICS group both collectively and individually. While the global economic landscape may grow more complex, a fundamental rebalancing is unlikely without major reforms within BRICS economies.
— news from ETF Database
— News Original —
Global Fracturing: The U.S. vs. BRICS in an Emerging Economic Rivalry
Stringer Asset Management Sep 12, 2025 n n2025-09-12 n nAfter decades of increasing global integration, signs of geopolitical and economic fracturing are becoming more visible. The trend arguably began with the U.K.’s decision to leave the European Union (Brexit), occurring around the time global trade peaked as a share of global GDP. More recently, a coalition of BRICS nations, led by China, India, and Russia, has emerged to counterbalance the long-standing U.S. led economic order, while the U.S. itself shows signs of growing economic and foreign policy isolationism. n nDespite headline driven uncertainty, we can use hard data to assess the potential of this economic rivalry by examining GDP, trade dynamics, currency dominance, and demographics. n nEconomic Output and Structural Weaknesses n nThe U.S. remains the largest economy by nominal GDP, reaching an estimated $29 trillion in 2024. The combined nominal GDP of BRICS nations (Brazil, Russia, India, China, and South Africa) is close behind at approximately $27 trillion, though that figure is significantly boosted by China’s contribution. n nContent continues below advertisement n nYet, GDP totals obscure structural weaknesses. The BRICS economies are heavily export-driven, particularly China, which creates vulnerabilities. China’s economic model relies on vast imports of raw materials to fuel its manufacturing dominance: n nMetals: China is the world’s largest importer of iron ore, copper, aluminum, and nickel to support their industrial and infrastructure needs. n nEnergy: It is the largest importer of crude oil globally. n nAgriculture: China imports large quantities of soybeans, corn, wheat, and dairy, which makes it a net food importer. n nAs global protectionism rises and western economies reduce dependence on Chinese supply chains, Beijing faces increasing pressure to identify new export markets while maintaining reliable import channels for essential commodities. This dual exposure presents long-term risks to China’s growth model. n nCurrency Dominance: The Dollar vs. De-Dollarization n nThe U.S. dollar remains the world’s dominant reserve and transaction currency (exhibit 2). As of 2022: n nAbout 58% of global foreign exchange reserves are held in U.S. dollars. n nOver 90% of global foreign exchange trades use the dollar. n nThe USD accounts for roughly 50% of global trade invoicing despite the U.S. only comprising 10% of world trade. n nCritically, around 80% of U.S. dollar usage in global trade does not involve U.S. residents or firms, which underscores the dollar’s entrenched role as the default global currency. Moreover, a majority of international loans and bonds are still issued in USD, even when neither the borrower nor lender is American. n nWhile BRICS countries, particularly China and Russia, have taken steps to reduce reliance on the dollar (e.g., settling bilateral trade in local currencies), they lack the asset depth, institutional trust, and liquidity to challenge the dollar’s dominance. As Brazil’s central bank has acknowledged, BRICS nations currently do not offer a viable alternative to dollar-denominated financial markets. n nDemographic Headwinds in BRICS n nOne of the starkest challenges facing the BRICS bloc, especially China and Russia, is demographic declines. n nChina’s fertility rate has dropped to just 1.3 children per woman, which is far below the 2.1 replacement rate. The working age population is shrinking while the elderly cohort grows rapidly (exhibit 3). By 2030, one in four Chinese citizens is estimated to over the age of 60. Compounding this is a gender imbalance as China has roughly 29 million more males than females, many of whom may never start families. All of this creates a long-term drag on consumption, productivity, and labor force participation. n nAdditionally, fewer young workers mean rising wages, lower competitiveness in labor-intensive sectors, and greater fiscal pressure to support aging populations. n nThese dynamics also make it harder for China to pivot from an export-driven economy toward one led by domestic consumption. n nRussia faces similar or worse demographic issues, including a declining birthrate and an aging population. Unlike China, reliable data from Russia is harder to obtain, but most outside experts agree that demographic stagnation is a major constraint on future economic growth. n nIn contrast, the U.S. (exhibit 4) enjoys a relatively healthier demographic profile, supported by immigration and a more stable age distribution that offers a long-term advantage in workforce availability and consumer demand. n nConclusion: An Uneven Contest n nThe emergence of BRICS as an economic bloc presents a potential challenge to U.S. leadership, but its cohesion is fragile, and its structural disadvantages are significant. The U.S. maintains clear advantages in GDP per capita, innovation, institutional strength, demographic sustainability, and financial system dominance. n nThat said, the U.S. will need to make substantial investments to reshore manufacturing and reduce strategic dependence on Chinese supply chains, especially if relations deteriorate further. n nIn the near term, the U.S. appears economically and institutionally stronger than the BRICS coalition, both as a group and certainly compared to any of its members individually. While the global order may shift in complexity, a wholesale rebalancing remains unlikely without major structural reforms in the BRICS economies. n nOriginally published at Stringer Asset Management n nFor more news, information, and analysis, visit the ETF Strategist Content Hub. n nDISCLOSURES n nAny forecasts, figures, opinions or investment techniques and strategies explained are Stringer Asset Management, LLC’s as of the date of publication. They are considered to be accurate at the time of writing, but no warranty of accuracy is given and no liability in respect to error or omission is accepted. They are subject to change without reference or notification. The views contained herein are not to be taken as advice or a recommendation to buy or sell any investment and the material should not be relied upon as containing sufficient information to support an investment decision. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. n nPast performance and yield may not be a reliable guide to future performance. Current performance may be higher or lower than the performance quoted. n nThe securities identified and described may not represent all of the securities purchased, sold or recommended for client accounts. 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