President-elect Donald Trump on Saturday threatened 100% tariffs on a nine-nation bloc if they act to weaken the US dollar.
His threat was aimed at countries called the BRIC alliance, which consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates.
Turkey, Azerbaijan and Malaysia have applied for membership and several other countries have expressed interest in joining.
Although the US dollar is the most widely used currency in global business and has faced challenges in the past, alliance members and other developing nations have said they are fed up with America dominance of the global financial system.
The dollar accounts for approximately 58% of the world’s foreign exchange reserves, According to the IMF and major commodities such as oil are still predominantly bought and sold using dollars. The dollar’s dominance is threatened, however, by the BRICS’ growing share of GDP and the alliance’s intention to trade in non-dollar currencies—a process known as de-dollarization.
Trump, in a Truth Social post, said: “We are asking for a commitment from these countries that they will not create a new BRICS currency, support another currency to replace the strong US dollar, or face 100% tariffs, and they should expect to sell off the wonderful US economy.” to say goodbye.”
At the summit of the BRIC nations in October, Russian President Vladimir Putin has accused the US of “weaponizing” the dollar and described it as a “big mistake”.
“We are not the ones who refuse to use the dollar,” Putin said at the time. “But if they don’t let us work, what can we do? We are forced to look for alternatives.”
Russia has particularly pushed for a new payment system that would provide an alternative to the global banking messaging network, SWIFT, and allow Moscow to bypass Western sanctions and negotiate with its partners.
Trump said there is “no chance” the BRICs will replace the US dollar in global trade and any country trying to do so “should say goodbye to America”.
Research shows that the role of the US dollar as the main reserve currency is not threatened in the near future.
An Atlantic Council model which assesses the dollar’s place as the leading global reserve currency with the dollar being “safe in the near to medium term” and continuing to dominate other currencies.
Trump’s latest tariff threat comes after he threatened to impose 25% tariffs on all imports from Mexico and Canada and an additional 10% tax on goods from China as a way to force countries to do more to stem the flow of illegal immigration. drugs to the US
He has since had a call with Mexican President Claudia Sheinbaum, and said on Thursday that he is confident about it a tariff war with the United States can be avoided Canadian Prime Minister Justin Trudeau He returned home on Saturday after meeting with Trump, with no assurances that the president-elect will back down on Canada’s threatened tariffs.
