Donald Trump has issued a stern warning to BRICS nations, cautioning them of potential 100% tariffs if they attempt to supplant the U.S. dollar as the global reserve currency or form their own unified currency.
The admonition was aimed at Brazil, Russia, India, China, South Africa, and new BRICS members Egypt, Ethiopia, Iran, and the United Arab Emirates. This comes in light of ongoing discussions about decreasing the reliance on the U.S. dollar in international trade.
“There is NO CHANCE that BRICS will replace the U.S. Dollar in International Trade, or anywhere else, and any Country that tries should say hello to Tariffs and goodbye to America!” Trump declared.
Trump’s statement aligns with his post on November 30, which came soon after his victory in the 2024 presidential election, and reaffirms his consistent position on safeguarding the dollar’s global hegemony.
Dmitry Peskov, the Kremlin’s spokesperson, dismissed Trump’s threats, clarifying that BRICS has no plans to create a shared currency. “American experts need to have a better understanding of the BRICS agenda,” Peskov said. “BRICS is not talking about creating its own currency – it is talking about creating joint investment platforms.”
India’s Foreign Ministry also played down the threat, stating that BRICS decisions are made by consensus and that India does not have a policy of de-dollarization. The discussions regarding the increased use of national currencies in transactions were sparked following the imposition of Western sanctions on Russia after the Ukraine invasion.
Accusing the United States of “weaponizing” the dollar, Russian President Vladimir Putin asserted that countries are being “forced to search for alternatives.”
Trump’s stance has drawn criticism from some economists, including Peter Schiff, who argued that BRICS nations are the “suckers” for accepting U.S. fiat currency in exchange for tangible goods and services.
A study conducted by the GeoEconomics Center of the Atlantic Council reveals that the U.S. dollar continues to be the primary reserve currency of the world, with neither the euro nor the BRICS nations successfully lessening the global dependency on the dollar.
South Africa’s government has clarified that while BRICS intends to fortify correspondent banking networks and develop infrastructure for settlements in national currencies, they are not in talks to establish a common BRICS currency.
Trump had also announced intentions to impose 25% tariffs on Canada and Mexico starting February 1, 2025, as part of his strategy to tackle illegal immigration and drug trafficking. The tariffs have since been postponed for 30 days. He has also imposed a 10% tariff on Chinese imports, highlighting China’s role as a fentanyl supplier.
The economic collaboration within BRICS has grown stronger since Western sanctions were imposed on Russia, with member countries exploring options to lessen their vulnerabilities to future sanctions. As per current information, India has not initiated any specific steps towards de-dollarization.