Trump Warns BRICS Against Ditching US Dollar, Threatens 100% Tariffs

Featured & Cover Trump Warns BRICS Against Ditching US Dollar Threatens 100% Tariffs

US President Donald Trump on Thursday issued a warning to BRICS nations against any move to replace the US dollar as the global reserve currency. He reiterated his previous threat of imposing 100% tariffs, a stance he first declared shortly after his victory in the November presidential elections.

“We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs,” Trump stated on Truth Social. His message closely mirrored a post he had made on November 30.

At the time of his initial warning, Russia dismissed the idea that the US could force nations to use the dollar, stating that such an approach would ultimately backfire.

BRICS and De-Dollarization

BRICS, which comprises Brazil, Russia, India, China, and South Africa, along with a few recent additions, has long debated the idea of establishing a common currency. Though no shared currency currently exists, discussions have gained traction, particularly after the West imposed sanctions on Russia following its invasion of Ukraine.

“There is no chance that BRICS will replace the US dollar in international trade or anywhere else, and any country that tries should say hello to tariffs and goodbye to America!,” Trump asserted in his statement.

Trump’s warning to BRICS coincides with Canada and Mexico awaiting his decision on whether he will proceed with his previously announced plan to impose 25% tariffs on US trade partners within North America. If enforced, the tariffs are expected to take effect on February 1.

Trump aims to use tariffs as a tool to pressure Mexico and Canada into taking stronger action against the trafficking of illegal drugs, particularly fentanyl, while also addressing the surge in illegal border crossings into the US.

Despite efforts by BRICS nations to reduce reliance on the dollar, the US currency has recently strengthened due to a robust American economy, tighter monetary policies, and ongoing geopolitical tensions. Economic fragmentation has fueled BRICS-led initiatives to move toward alternative currencies, but the dollar remains dominant.

A study conducted by the Atlantic Council’s GeoEconomics Center last year reaffirmed the enduring role of the US dollar as the world’s primary reserve currency. The research indicated that neither the euro nor the BRICS bloc has significantly succeeded in reducing global dependence on the dollar.

Push for an Alternative Global Currency

BRICS nations have been actively working to diminish the US dollar’s influence in the global financial system, including discussions on launching a new global currency. At the 15th BRICS Summit in 2023, Russian President Vladimir Putin strongly advocated for de-dollarization. He urged member nations to enhance financial settlements in their respective national currencies and bolster cooperation among their banking institutions.

Momentum for these de-dollarization efforts accelerated after the US expelled Russia from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a crucial network facilitating international financial transactions. A similar move had been made against Iran in 2012, which was widely seen as a factor that pushed Tehran to negotiate in 2015.

As BRICS nations continue exploring financial alternatives, Trump’s warning underscores Washington’s firm stance on protecting the dominance of the US dollar in the global economic system.

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