In a recent development, President-elect Donald Trump has issued a warning to BRICS countries regarding their potential move to replace the US dollar. He has sought a commitment from the nine-member group, which includes India, Russia, China, and Brazil, to refrain from creating a new BRICS currency or supporting any other currency that could potentially replace the dollar. Trump has threatened that failure to comply with this demand would result in facing 100% tariffs and losing access to the US market.
BRICS, established in 2009, is a major international group that does not include the United States as a member. The other countries in the group are South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates. In recent years, Russia and China, in particular, have been exploring alternatives to the US Dollar by considering the creation of a BRICS currency. However, India has not been actively involved in this initiative so far.
In a tweet on November 30, Trump emphasized the need for these countries to commit to not creating a new currency or backing any alternative to the US Dollar. He warned that failure to comply would result in severe consequences, including tariffs and restricted access to the US economy.
Trump firmly stated that there is no possibility of BRICS replacing the US Dollar in international trade. He emphasized that any country attempting to do so should be prepared to lose access to the American market.
At a recent summit, Russian President Vladimir Putin criticized the United States for ‘weaponizing’ the dollar and forcing countries like Russia to explore alternative options. Trump has consistently expressed his desire to maintain the dominance of the US dollar as the world’s reserve currency, and he has indicated that he will take measures to ensure countries comply with this preference.
Efforts are being made by Trump and his economic advisors to deter countries from engaging in bilateral trade using currencies other than the dollar. Potential measures being considered include export controls, currency manipulation charges, and trade levies. Trump has made it clear that he will not allow countries to move away from the dollar as it would negatively impact the United States.
While the US dollar continues to be the primary currency for global commerce, members of the BRICS alliance and other developing nations have expressed frustration over what they perceive as America’s disproportionate influence over the global financial system. Trump’s warnings and threats of tariffs have already disrupted world markets, signaling his intention to maintain the US dollar’s dominance and control over international trade.