BRICS Finance Ministers & central bank chiefs voice concern about 'unilateral imposition' of tariffs
BRICS finance ministers and central bank governors met under India's BRICS chairship — first in Jaipur (August 12, 2026) and then in Mumbai (September 9-10, 2026) — and issued a joint statement ahead of the New Delhi Summit.
The statement raised "serious concerns" over the unilateral imposition of higher tariffs and non-tariff measures, describing such actions as inconsistent with World Trade Organization (WTO) rules and distortive of international trade.
Members flagged that the global economy faces headwinds from "persistent geopolitical tensions, trade fragmentation and protectionism, policy uncertainty, fiscal and inflationary pressures, growing debt and financial vulnerabilities."
The statement also reiterated support for practical, local-currency solutions for cross-border payments among members, alongside its trade-policy concerns.
The Most-Favoured-Nation (MFN) Principle
MFN is the cornerstone non-discrimination rule of the multilateral trading system, set out in Article I of the General Agreement on Tariffs and Trade (GATT), 1947 (carried into the WTO framework from 1995). It requires that any trade advantage — such as a tariff concession — granted by a WTO member to one trading partner must be extended "immediately and unconditionally" to like products from all other WTO members, subject to limited exceptions (such as free trade agreements under GATT Article XXIV).
Key Details
- GATT Article I:1 is the foundational MFN clause; it applies to tariffs, import/export regulations, and internal taxes and charges on traded goods
- WTO members may deviate from MFN only through explicitly permitted routes — regional/free trade agreements (Article XXIV), special and differential treatment for developing countries, or general/security exceptions (Articles XX and XXI)
- A tariff imposed unilaterally on specific countries, outside these permitted routes, is what trade-policy statements typically mean by "inconsistent with WTO rules"
When the BRICS statement calls unilateral tariff hikes "inconsistent with WTO rules," it is invoking this core MFN discipline — the principle that tariff treatment cannot ordinarily be selectively imposed on chosen trading partners outside the WTO's own permitted exceptions.
The WTO Dispute Settlement Crisis and the Appellate Body
The WTO's dispute settlement system was designed to enforce trade rules through a two-tier process — panels, with a standing Appellate Body to hear appeals. Since December 2019, the Appellate Body has been non-functional after losing its minimum quorum of three members, because the United States has blocked new appointments since 2017 over concerns about "judicial overreach." This has effectively returned WTO dispute enforcement to a pre-1995-style system in which rulings can be appealed "into the void" and never become legally binding.
Key Details
- Appellate Body quorum lost: December 11, 2019 (needs a minimum of 3 sitting members to hear appeals; normal composition is 7)
- A subset of WTO members created the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) in 2020 as a workaround, but it excludes major economies including the United States and India
- With no functioning appellate mechanism, an unfavourable panel ruling can be rendered practically unenforceable simply by filing an appeal that can never be heard
The paralysis of the WTO's binding dispute settlement mechanism is precisely why unilateral tariff measures have proliferated in recent years — aggrieved WTO members increasingly lack a reliable, enforceable venue to challenge them, which is the underlying institutional weakness behind BRICS repeatedly having to raise such concerns diplomatically rather than through adjudication.
Safeguard Measures vs. Unilateral Punitive Tariffs
WTO law does permit countries to raise tariffs temporarily under specific, rules-based circumstances — chiefly through "safeguard measures" under GATT Article XIX and the WTO Agreement on Safeguards, applied when a sudden import surge causes serious injury to a domestic industry. These differ fundamentally from unilateral punitive tariffs (such as tariffs imposed under domestic trade-remedy statutes citing national security or unfair-trade-practice findings) in that safeguards must be non-discriminatory (applied to all trading partners, MFN-consistent), time-bound, and subject to WTO notification and consultation requirements.
Key Details
- WTO Agreement on Safeguards requires safeguard tariffs to be applied on an MFN basis (not targeted at specific countries) and generally capped at four years, extendable up to eight
- By contrast, unilateral tariffs imposed under domestic statutes targeting specific countries (rather than all trading partners equally) do not meet the safeguard framework's non-discrimination requirement, which is the basis for characterising them as WTO-inconsistent
- Retaliatory or "reciprocal" tariffs — imposed in response to another country's measures rather than through WTO-authorised retaliation following a dispute ruling — also fall outside the safeguard framework
The distinction between rules-based safeguard tariffs and unilateral country-specific tariffs is the technical basis for BRICS finance ministers' claim that recent unilateral tariff actions breach WTO disciplines rather than falling under any permitted exception.
- BRICS finance ministers/central bank governors met: Jaipur (August 12, 2026) and Mumbai (September 9-10, 2026), under India's 2026 BRICS chairship
- GATT Article I: the Most-Favoured-Nation (MFN) clause, in force since 1947 (WTO since 1995)
- WTO Appellate Body lost quorum: December 11, 2019; normal composition is 7 members, minimum 3 needed to hear an appeal
- MPIA (interim WTO appeal workaround) formed: 2020; excludes the United States and India among others
- WTO Agreement on Safeguards: permits temporary, MFN-consistent tariff relief for import-surge injury, typically capped at 4 years (extendable to 8)