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President-elect Donald Trump issued a stark warning Saturday, threatening 100% tariffs on a bloc of nine nations in the BRICS alliance if they attempt to undermine the U.S. dollar.
Trump’s threat comes as BRICS nations—Brazil, Russia, India, China, South Africa, along with Egypt, Ethiopia, Iran, and the UAE—explore alternatives to the dollar in global trade.
In a Truth Social post, Trump demanded a clear commitment from BRICS nations to abstain from creating or supporting a new currency to rival the dollar. “We require a commitment from these 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 wrote. “Expect to say goodbye to selling into the wonderful U.S. economy.”
The Rise of BRICS and the De-Dollarization Push
BRICS, originally a grouping of emerging economies, has grown in influence and now accounts for a significant share of global GDP. As the bloc expands, with Turkey, Azerbaijan, and Malaysia applying for membership, the group’s push for “de-dollarization” has gained momentum.
This process involves reducing reliance on the U.S. dollar by using local currencies or creating a new currency for trade. Critics of U.S. financial dominance, like Russian President Vladimir Putin, have accused the U.S. of “weaponizing” the dollar through sanctions and restrictive financial policies. At a BRICS summit in October, Putin said, “We are forced to search for alternatives” due to U.S. restrictions.
Russia has advocated for a new international payment system to bypass the U.S.-dominated SWIFT network and circumvent Western sanctions.
Trump’s Trade Tactics and Global Response
Trump’s tariff threats echo his earlier hardline stance on trade, including previous proposals for tariffs on Mexico, Canada, and China. His aggressive economic posture aims to protect U.S. interests, though it risks sparking trade wars. Trump reiterated, “There is no chance BRIC will replace the U.S. dollar in global trade,” warning that any nation attempting to do so should “wave goodbye to America.”
Despite Trump’s rhetoric, experts remain skeptical that the dollar’s dominance is under immediate threat. According to the Atlantic Council, the U.S. dollar’s role as the primary global reserve currency is “secure in the near and medium term,” with approximately 58% of global foreign exchange reserves held in dollars, as reported by the IMF.
Potential Fallout
Trump’s threats have already raised tensions with key trading partners. Mexican President Claudia Sheinbaum expressed optimism that a trade conflict could be avoided after discussions with Trump, while Canadian Prime Minister Justin Trudeau returned from a meeting with Trump without assurances that threatened tariffs on Canada would be withdrawn.
The looming tariff threats underscore the high stakes of Trump’s economic policies and the global financial system’s dependency on the U.S. dollar. While BRICS nations push for alternatives, the U.S. dollar remains the dominant currency in global trade, for now.
