RE: Tit for tat escalated quickly. Trump slaps 104% tariff on Chinese goods. European VAT is not a tariff, it's a high sales tax in the EU, affecting all products, hence neutral.

Do you think the rise of BRICS and digital currency alliances could speed up the shift away from the dollar if the U.S. keeps pushing this isolation route?

Yep, absolutely and actual threat, without allies you cannot win a trade war against China, BRICS, rest of the world will unite and continue trading, with minimal tariffs, even threatening the USD dominance in the long run, when investors will turn away from the US stock market because of tariffs, and lower export, growth potential of US tariff protected companies. Also innovation will suffer with protectionism. Shielding oneself from global competition cannot be good in the long run.