President-elect Donald Trump has once again threatened to impose 100% tariffs on members of the BRICS group&mdash;Brazil, Russia, India, China, and South Africa&mdash;if they move forward with plans to reduce their reliance on the US dollar in international trade. The bold warning, issued Saturday via his social media account @TrumpDailyPosts, has sparked concern among economists, who argue that such a policy could harm American consumers and businesses.
Trump's comments come at a time when BRICS nations, representing nearly 45% of the world&rsquo;s population, are increasingly seeking to create alternatives to Western financial institutions and reduce their dependency on the US dollar. As these countries push for a new global economic order, Trump&rsquo;s threat serves as a reminder of the high-stakes geopolitical competition for economic dominance.
In his post, Trump wrote: &ldquo;The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER,&rdquo; adding, &ldquo;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.&rdquo; The post concluded with a scathing remark: &ldquo;They can go find another &lsquo;sucker!&rsquo;&rdquo;
Experts suggest that Trump's tariff threats are likely more of a political maneuver aimed at energizing his domestic voter base, rather than a feasible economic strategy. Past trade wars, particularly the US-China conflict, show that such tariffs often hit American consumers harder than the targeted countries.
The growing strength of BRICS&mdash;now with 11 members including Saudi Arabia, the UAE, and Iran&mdash;poses a direct challenge to US economic hegemony. Collectively, BRICS nations account for 28% of the global economy and 30% of global oil production. This bloc has also been pushing for a shift toward using local currencies in trade, a trend that has been growing steadily from 2017 to 2022.
Despite this momentum, replacing the US dollar as the world&rsquo;s dominant currency remains a distant goal. BRICS countries currently control 42% of global forex reserves but hold just 10% of the world&rsquo;s gold reserves&mdash;critical factors in establishing a new global reserve currency. Economists argue that the bloc&rsquo;s ability to create a stable, alternative currency is unlikely in the near future, given internal disparities and external challenges, including the continued reliance on the US dollar for global oil trade.
The US has also been closely watching the rise of the BRICS-backed New Development Bank, which has been funding infrastructure projects in member countries. While this could provide a challenge to the World Bank and IMF, which are heavily influenced by Western powers, it remains unclear whether the BRICS nations can offer a viable alternative to the US-dominated financial system.
In a more direct response to Trump's comments, analysts note that history shows tariffs may backfire. During the 2018 US-China trade war, Trump imposed tariffs worth $380 billion on Chinese imports, arguing that China would bear the cost. However, National Bureau of Economic Research studies found that American consumers and businesses bore the brunt of the tariff costs, The New York Fed study estimated an additional cost of $831 per American household annually. The trade war also caused significant losses for US farmers, who had to sell their produce at discounted rates to countries like Brazil and Argentina.&nbsp;The conflict also resulted in a $6 billion loss to the American treasury when China halted agricultural imports, forcing US farmers to sell at discounted rates to other markets.
As BRICS countries continue to push for a more diversified global financial system, Trump&rsquo;s threat to impose tariffs may simply fuel greater efforts to bypass the US dollar, which could ultimately have long-term repercussions for the American economy.
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US president-elect signals tough stance against emerging economic bloc's plans to reduce reliance on the dollar

Trump Threatens 100% Tariffs on BRICS Members

US president-elect signals tough stance against emerging economic bloc's plans to reduce reliance on the dollar

December 1, 2024 | 11:00 IST