Trump Threatens Tariffs on BRICS Countries
Donald Trump, the newly elected President of the United States, has threatened to impose a 100% tariff on countries that create an alternative currency to the US dollar among BRICS nations. This group of countries, including China and Russia, had proposed to create a common currency aimed at reducing the dominance of the US dollar in global trade. However, Trump indicated that they expect a commitment from BRICS nations not to pursue such an initiative.
In a statement made on the social media platform Truth Social, Trump stated, "The era of us merely watching as BRICS nations attempt to move away from the dollar is over. We demand these countries commit not to create a new BRICS currency or support any other currency; otherwise, they will face 100% tariffs." Meanwhile, some of Trump’s allies suggest that such statements could be more of a negotiation tactic.
BRICS, which consists of Brazil, Russia, India, China, and South Africa since 2011, has expanded this year with the addition of Iran, the United Arab Emirates, Ethiopia, and Egypt. South African officials have noted that 34 countries are interested in joining this large emerging markets bloc. Brazilian President Luiz Inácio Lula da Silva proposed creating a common currency in South America in 2023, but the chances of a new currency forming appear low due to the group's economic and geopolitical differences.
Under these conditions, countries like China and Russia might aim to bypass Western sanctions by utilizing their banking networks outside of the dollar-centric system. However, Russian President Vladimir Putin stated that the formation of such a currency is not currently on the agenda and that it should be approached with caution. He also mentioned that they are exploring opportunities for broader use of national currencies.
Trump's recent economic threat towards BRICS came just a few days after he announced significant tariff increases on goods from Mexico, Canada, and China. Trump declared that he would raise tariffs on products from these countries on his first day in office, citing illegal immigration, crime, and drug trafficking as reasons for this decision.
During this period, a meeting took place between Trump and Canadian Prime Minister Justin Trudeau at Trump's Mar-a-Lago estate in Florida. Trudeau described the meeting as "a great conversation," while Trump noted that it was a productive discussion. Scott Bessent, who Trump has chosen as his Secretary of Commerce, stated that these types of threats are essentially negotiation strategies, and Trump is ultimately in favor of free trade.