United States President Donald Trump Friday repeated his intention to impose 100% import tariffs on the BRICS (Brazil, Russia, India, China, and South Africa) countries if they took any steps towards cutting the use of the dollar in global trade.
In a post shared on social media platform Truth Social, Trump declared that the United States would not stand idly by while the BRICS bloc pursues the development of an alternative currency. Trump, who has already kicked off imposition of tariffs on Canada and Mexico, demanded a firm commitment from BRICS nations to cease any attempts to create a new currency or back existing currencies in competition with the US dollar. Failure to comply, he warned, would result in severe consequences, including the imposition of 100 per cent tariffs on goods imported from these countries and the end of their access to the US market.
‘No Chance’ of BRICS replacing the Dollar
In his post, Trump dismissed the notion that the BRICS nations could successfully challenge the global dominance of the US dollar, calling it “mighty” and irreplaceable in international trade. He described any such attempt as futile, stating, “There is no chance that BRICS will replace the US Dollar in International Trade, or anywhere else.”
The US President’s message was accompanied by an ultimatum: “Any Country that tries should say hello to Tariffs, and goodbye to America!” This sharp rhetoric reflects Trump’s longstanding belief in protecting US economic interests through aggressive trade policies.
The BRICS nations, representing some of the largest emerging economies in the world, have previously signalled interest in reducing their reliance on the US dollar in global transactions. This has led to speculation that the group may seek to create a shared currency or increase the use of national currencies in bilateral trade. Such moves could potentially weaken the dollar’s position as the world’s primary reserve currency.
Tariff threat revives Trump’s old tactics
Trump’s mention of tariffs as a measure against BRICS countries underscores a return to his signature trade policy tactics. During his first term, Trump had imposed tariffs on a wide range of goods in an effort to balance trade deficits and bolster US manufacturing.
In his post, Trump suggested that countries attempting to move away from the dollar would face similar repercussions. “They will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful US Economy,” he wrote.
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Many BRICS nations — particularly China — are major exporters to the US market. In 2022, the US imported $536.8 billion worth of goods from China, making it one of the largest trading relationships in the world. Trump’s threats to impose steep tariffs could lead to a breakdown in these economic ties.
What is India’s position amid this row?
In recent times, India has been attempting to reduce its reliance on the US dollar and to internationalise the Indian rupee. The Reserve Bank of India (RBI) has allowed invoicing and payments for international trade in Indian rupees in 2022, after sanctions were imposed on Russia amid the war in Ukraine.
In his remarks at Kazan, Prime Minister Narendra Modi said India “welcome[d] efforts to increase financial integration among BRICS countries”, and “trade in local currencies and smooth cross-border payments will strengthen our economic cooperation”.
In November 2024, External Affairs Minister S Jaishankar had told the India-Russia Intergovernmental Commission meeting in Mumbai that “mutual settlement of trade in national currencies is of great importance, especially in the current circumstances”.
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