What Are The BRICS Nations: Why Is Donald Trump Threatening Them With A 100% Tariff?

President-elect Donald Trump has issued a stark warning to the BRICS nations, threatening a 100% tariff on their exports to the United States if they pursue plans to create a new currency. This bold move targets the bloc of emerging economies, comprising Brazil, Russia, India, China, and South Africa, alongside recently added members such as Saudi Arabia, the UAE, Egypt, Ethiopia, and Iran. Trump's statement, shared via Truth Social, highlighted his concerns over attempts to undermine the dominance of the US dollar in global trade.

Trump declared, "The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER. 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."

The Role and Ambitions of BRICS

The BRICS alliance, representing nearly a quarter of the world's GDP, has been exploring alternatives to the US dollar for international trade, a move known as "de-dollarisation." Countries like China and Russia have voiced support for creating a payment system independent of the US-led financial structure. Russian President Vladimir Putin has criticised the dollar's "weaponisation," stating that Western sanctions force nations to seek financial alternatives.

The expansion of BRICS earlier this year to include nations like Saudi Arabia and the UAE has further amplified their collective economic clout. However, analysts believe significant economic and political differences among BRICS members could hinder the successful implementation of a shared currency.

Impact on the US Dollar and Global Trade

Despite the rhetoric surrounding de-dollarisation, experts suggest that the dollar remains unchallenged as the world's leading reserve currency. According to the IMF, the dollar accounts for 58% of global foreign exchange reserves. An Atlantic Council study reinforces that the dollar's dominance in global trade is secure for the foreseeable future.

However, BRICS members argue that the dominance of the dollar imposes economic risks on developing nations. By using non-dollar currencies and banking networks outside the US-led system, countries like Russia and Iran aim to bypass Western sanctions. This economic defiance adds fuel to Trump's hard-line stance.

Reactions and Broader Implications

Trump's threat comes amid escalating tensions with major trading partners. He has already proposed steep tariffs on imports from Mexico, Canada, and China to address illegal immigration and other concerns. While Mexican President Claudia Sheinbaum expressed optimism about averting a trade conflict, Canadian Prime Minister Justin Trudeau left recent talks without firm assurances from Trump.

The 100% tariff threat, if implemented, could significantly strain US relations with BRICS nations and disrupt global trade flows. Economists warn that such a policy could trigger retaliatory tariffs, affecting American businesses and consumers.