A US presidential candidate has vowed to impose 100% tariffs on any country attempting to replace the US dollar in international transactions.
Republican presidential nominee Donald Trump has asserted that abandoning the US dollar would be extremely costly for foreign countries pursuing such a policy. He has stated that these countries would face unprecedented import taxes for engaging in non-dollar trade.
Speaking to supporters at a campaign rally in Wisconsin on Saturday, the former US president pledged to maintain the greenback’s position as the world’s reserve currency. He emphasized that the dollar is “under major siege” due to a growing number of countries turning to alternative settlement methods.
“If you leave the dollar, you’re not doing business with the US, because we are going to put a 100% tariff on your goods,” Trump stated.
A significant trend towards utilizing national currencies instead of the US dollar has gained momentum following the imposition of substantial economic restrictions against Russia by the US and its allies in the wake of the escalation of the Ukrainian conflict in February 2022. After being cut off from the Western financial system, Moscow has explored alternative settlement options, with some of Russia’s foreign partners following suit.
Last week, Russian President Vladimir Putin asserted that Russia hadn’t been pursuing a de-dollarization policy but was compelled to seek other options after a series of unprecedented measures. These measures included the disconnection of Russia’s central bank from dollar transactions, a ban on transferring US banknotes to the country, and the freezing of Russia’s foreign currency reserves.
According to Putin, Moscow and its BRICS partners are now using national currencies in 65% of their mutual trade settlements.
Members of the Association of Southeast Asian Nations (ASEAN) are planning to discuss a shift towards settlements in local currencies, instead of the US dollar, euro, yen, and pound sterling. The combined GDP of this economic bloc, which includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, is reportedly $4 trillion.
Last week, the presidential candidate pledged to significantly reduce Washington’s use of sanctions if re-elected in November. Speaking at the Economic Club of New York, Trump acknowledged that the curbs imposed by the US on other nations are detrimental to the dollar.