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In a recent development, President-elect Donald Trump has warned BRICS countries against any move to replace the US dollar and has sought a commitment from the nine-member group that includes India, Russia, China, and Brazil.
The President-elect has asked these countries to promise not to create a new BRICS currency or support any other currency that might replace the dollar, otherwise, they will face 100% tariffs and lose access to the US Market.
Formed in 2009, BRICS is the only major international group of which the United States is not a part. Its other members are South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates. Notably, over the past few years, a few of its member countries, particularly Russia and China, are seeking an alternative to the US Dollar to create their own BRICS currency. However, India has so far not been a part of the move.
In an X post on Saturday, November 30, Trump warned these countries of such a move.
“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, and should expect to say goodbye to selling into the wonderful U.S. Economy,” the President elect underscored.
‘No Chance BRICS Will Replace USD’
He firmly made known that there is no chance that the BRICS will replace the U.S. Dollar in international Trade, and further noted that any country that tries, should wave goodbye to America.
At a recent summit, Russian Vladimir Putin blamed the United States of America for ‘weaponizing’’ the dollar, terming it as a big mistake. Putin highlighted that Russia is not choosing to abandon the dollar but is forced to look for other options because of US restrictions.
Notably, Trump on his campaign trail pledged that he would make it costly for countries to move away from the US dollar. And threatened to use tariffs to ensure they complied.
Efforts To Keep USD Dominance Intact
Trump and his economic advisers have been discussing ways to punish allies and adversaries alike who seek to engage in bilateral trade in currencies other than the dollar. Those measures include considering options such as export controls, currency manipulation charges, and levies on trade.
Trump has long stressed that he wants the US dollar to remain the world’s reserve currency, saying in a March interview with CNBC that he “would not allow countries to go off the dollar” because it would be “a hit to our country.”
BRICS Members Express Frustration
The US dollar has been the bedrock of global commerce for a long time and continues to dominate as the world’s most widely used currency. However, members of the BRICS alliance and from the developing nations have expressed frustration as they believe that America has outsized control over the global financial system.
The president-elect has already intimidated the world markets ahead of his second term with threats to levy an additional 10 per tariff on goods from China and 25 percent tariffs on all products from Mexico and Canada if these countries do not take actions to control the flow of illegal drugs and undocumented migrants across US borders.