Trump threatens 100% tariffs on BRICS nations over de-dollarisation efforts

Trump warns BRICS against replacing the US dollar

US President Donald Trump has issued a strong warning to BRICS nations, threatening to impose 100% tariffs on their exports if they attempt to replace the US dollar as the dominant global trade currency.

Trump has consistently opposed de-dollarisation, insisting that BRICS countries must maintain the dollar’s role in global trade or face economic repercussions.

“The idea that the BRICS countries are trying to move away from the dollar while we stand by and watch is OVER,” Trump wrote on social media.

“We 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 US dollar.

Otherwise, they will face 100% tariffs and should expect to say goodbye to selling into the wonderful US economy. They can go find another sucker nation!”

BRICS’ push for de-dollarisation

The BRICS group—Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran, and the UAE—has been exploring ways to reduce reliance on the US dollar for international trade.

• 15th BRICS Summit (2023): Russian President Vladimir Putin called for de-dollarisation, urging increased use of national currencies in trade.
• June 2024 BRICS Meeting (Russia): BRICS foreign ministers backed the use of local currencies for bilateral and multilateral trade to decrease dependence on the USD.

India’s stand on de-dollarisation

Following Trump’s statement, India’s External Affairs Minister S Jaishankar responded, clarifying that:

• India does not support replacing the US dollar but is exploring alternative trade mechanisms to safeguard its economic interests.
• There are currently no official proposals for a BRICS currency.

Trump’s strategy to maintain USD dominance

Trump has long used tariffs as leverage to influence economic policies:

• Threatened tariffs on Mexico and Canada to address immigration and drug trafficking concerns.
• Previously criticized India as a “trade abuser”, and now extends similar rhetoric towards BRICS nations.
• Argues that higher tariffs will lower taxes for Americans and bring manufacturing jobs back to the US.

However, economists warn that excessive tariffs could increase costs for American consumers and businesses, particularly those dependent on imported raw materials.

Will BRICS replace the US dollar?

Despite growing efforts to reduce reliance on the USD, the US dollar remains the dominant global currency, accounting for over 90% of international transactions.

While currencies like the euro, yen, and British pound are widely used, a unified BRICS currency would offer an alternative for trade, reducing reliance on the US dollar.

The battle between US economic policies and BRICS’ push for financial independence is set to intensify, with Trump signaling harsh economic measures against any country attempting to challenge the USD’s global dominance.

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