In a sharp and sweeping declaration on Saturday, US President-elect Donald Trump issued a warning to the BRICS nations regarding their growing ambitions to challenge the dominance of the US dollar in global trade. Trump’s statement, posted on his Truth Social platform, carried a stark ultimatum: any attempt by the BRICS countries to introduce or support a reserve currency to rival the dollar would be met with 100 percent tariffs on their goods entering the US market.

This high-stakes warning underscores the geopolitical tensions surrounding the US dollar’s status as the world’s leading reserve currency and the BRICS coalition’s push for economic independence from Western financial systems.

“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 his Truth Social platform on Nov 30. He demanded that the BRICS nations-comprising Brazil, Russia, India, China, and South Africa, alongside recent additions Egypt, Iran, Ethiopia, and the United Arab Emirates-pledge not to create a new reserve currency or back any alternative to the US dollar.

Failure to comply, Trump warned, would trigger the imposition of massive tariffs, effectively shutting these countries out of the US economy. “They can go find another ‘sucker!” he declared, adding that any nation attempting to replace the dollar in international trade should “wave goodbye to America.”

Trump’s rhetoric signals his readiness to wield tariffs as a primary tool of economic diplomacy, a hallmark of his previous administration. His prior use of tariffs targeted countries like China, Canada, and Mexico to address trade imbalances, curb immigration, and pressure foreign governments to align with US policies.

The BRICS bloc has long sought alternatives to the dollar to reduce dependency on Western-dominated financial systems. Russia first proposed the idea of a BRICS currency in 2022, with Brazilian President Luiz Inácio Lula da Silva voicing support for a common currency to minimize vulnerability to fluctuations in the dollar’s exchange rate.

Although the BRICS leaders have not formally announced plans for a new currency, the group has made strides toward reducing dollar dependence. At their summit in Kazan, Russia, in October, they pledged to establish a cross-border payment system as an alternative to the Western-dominated SWIFT network and to increase the use of local currencies in trade.

Kremlin spokesman Dmitry Peskov insisted that BRICS cooperation is “not directed against anyone or anything – neither against the dollar nor against other currencies.” Russian President Vladimir Putin echoed this sentiment, arguing that using local currencies for trade fosters economic growth free from political interference.

Despite these assurances, the US remains deeply concerned about any moves that could undermine the dollar’s status. As the global reserve currency, the dollar underpins international trade and financial markets, providing the US with unmatched economic leverage.

The dollar’s status as the world’s reserve currency gives the US significant advantages. It allows the government to borrow cheaply, ensures high demand for Treasury bonds, and provides unparalleled influence over global trade and finance.

However, the BRICS nations argue that their push for an alternative currency or payment system is not an attack on the dollar but a measure to safeguard their economies against external shocks and political pressures from Washington. For example, sanctions on Russia following the Ukraine conflict have highlighted the risks of overreliance on dollar-based systems.

The idea of a BRICS currency also reflects broader frustrations among emerging economies regarding the US’s ability to use its currency dominance to impose unilateral sanctions and dictate global economic policies.

While a BRICS reserve currency remains a distant prospect, efforts to bypass the dollar in bilateral trade have gained traction. India and Russia, for instance, have increased trade settlements in rupees and rubles. Similarly, China has promoted the use of its yuan in trade agreements with several countries.

Trump’s threat to the BRICS nations fits within his broader economic vision, which emphasizes tariffs as a tool to protect US interests. During his presidency, Trump imposed tariffs on $360 billion worth of Chinese goods, triggering a trade war that disrupted global supply chains.

In his campaign for the 2024 election, Trump pledged to reintroduce and expand tariffs to address the US trade deficit, penalize offshoring, and combat perceived threats to American sovereignty. Among his proposed measures is a blanket 20 percent tariff on all imports, as well as targeted tariffs on countries like Canada and Mexico to curb migration and drug trafficking.

This week, Trump announced plans to impose an additional 10 percent tariff on Chinese goods until Beijing “follows through” on punishing the producers and smugglers of fentanyl, a synthetic opioid fueling the US drug crisis.

Critics argue that Trump’s tariff strategy risks alienating allies, raising costs for American consumers, and triggering retaliatory measures. However, Trump’s supporters view it as a necessary step to rebalance trade relationships and protect American jobs.

Trump’s ultimatum to the BRICS nations is likely to provoke strong reactions. For countries like China and Russia, which are already under US sanctions, the threat of additional tariffs may reinforce their resolve to develop alternatives to the dollar.

Other BRICS members, such as Brazil, India, and South Africa, face a delicate balancing act. While these countries value their economic ties with the US, they also see the potential benefits of reducing dependence on the dollar and enhancing trade with fellow BRICS members.

The tariff threat also raises questions about the future of US trade policy under Trump’s leadership. By framing economic relationships in terms of zero-sum competition, Trump risks further isolating the US from emerging economies and undermining multilateral institutions.

Trump’s stark warning to the BRICS nations highlights the high stakes of the battle for global economic influence. While the US seeks to defend the dollar’s dominance, the BRICS bloc aims to carve out a more independent path in international trade.

Whether Trump’s tariff threats will deter the BRICS countries from pursuing their ambitions remains to be seen. However, the escalating rhetoric underscores the growing tensions between the world’s largest economy and a coalition of emerging powers seeking to reshape the global financial order.

As Trump prepares to take office, his hardline approach to trade and currency issues signals a tumultuous period ahead for US-BRICS relations, with significant implications for the global economy.

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