Huddles and gatherings were common this past week as Americans celebrated the traditional Labor Day end of summer and welcomed the full return of college football. But perhaps the most notable huddle was that in which Xi Jinping, Narendra Modi and Vladimir Putin seemed to celebrate a freshly emergent relationship as India looks to counter-balance the recent deterioration of its economic relationship with the United States.
Shifts in global economic power typically happens over years, not months, but the pace of current change is remarkable. An example of this is the deterioration in US/China trade. Since the beginning of 2024, US monthly exports to China have collapsed by nearly 40% while exports to China from trade partners such as India and Brazil continue their five-year trend of steady increases. Tariffs are no small part of this, but there are also dynamics among the traditional BRICS countries (Brazil, Russia, India, China and South Africa) that have nothing to do with the United States. The respective complementary nature of commodity availability and industrial capacity is motivating these countries to re-engage for global trade in a fashion that evokes the golden age of BRICS investment of the early 2000s.As we continue to see global investment flows diversify away from the United States, the rebooting of the positive relationship among BRICS countries may be a key indicator of the resilience of global investment returns vis-à-vis the US. Excluding the Artificial Intelligence theme, global stocks, particularly those in China and Brazil, have trounced US stocks this year. Perhaps this is a single-year reversion of a deep value trade, but as cooperation improves among the leaders of the traditional emerging market leaders this may solidify a multi-year trend toward global equity market leadership.
Important Disclosures & Definitions
BRICS: an acronym for Brazil, Russia, India, China and South Africa. The organization seeks to deepen economic cooperation between the member countries and stand in contrast to the Western sphere of power.
AAI000989 09/09/2026