President-elect Donald Trump has issued a stern warning to any nation considering replacing the US dollar as the global reserve currency: they will face the consequences.
The BRICS nations face a 100% tariff on their goods if they attempt to introduce a rival reserve currency, Trump warned. This is consistent with Trump’s history of using tariffs to advance his geopolitical agenda.
”The notion of BRICS Countries abandoning the Dollar without our response is UNACCEPTABLE,” Trump stated on his Truth Social platform Saturday.
Trump demanded that BRICS nations pledge against creating a common currency or supporting any alternative to the US dollar, or they will incur 100% tariffs.
”They can search for another ‘fool!’” he added. “There’s no chance BRICS will replace the US Dollar in International Trade, and any Country attempting this should say goodbye to America.”
BRICS, initially composed of Brazil, Russia, India, China, and South Africa, expanded in January to include Egypt, Iran, Ethiopia, and the United Arab Emirates. Approximately 30 more countries have expressed interest in joining this group of developing economies.
Russia, currently holding the rotating presidency, proposed a BRICS currency in 2022. Brazilian President Luiz Inacio Lula da Silva supported this proposal last year, suggesting that a new reserve currency would lessen the BRICS countries’ “vulnerability” to dollar exchange rate fluctuations.
At their summit in Kazan, Russia last month, BRICS leaders refrained from formally announcing plans for such a currency. Instead, they committed to establishing a cross-border payment system to complement SWIFT and increase the use of local currencies in international trade.
”BRICS cooperation targets no one – neither the dollar nor other currencies,” Kremlin spokesman Dmitry Peskov stated in October. “Its primary objective is safeguarding the interests of participating nations.”
Utilizing local currencies for bilateral trade settlements “helps maintain economic development free from political influence,” Russian President Vladimir Putin noted at the time.
Trump has pledged to utilize tariffs to address US trade deficits, compel the return of offshore manufacturing, and achieve various geopolitical objectives. In addition to proposing a universal 20% tariff on all imports, he has threatened Canada and Mexico with an extra 25% tariff if they fail to curb the flow of migrants and drugs into the US. Trump also announced this week that “we will impose an additional 10% tariff on China, beyond any existing tariffs,” until Beijing “complies” with penalizing fentanyl producers and smugglers.