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Florida’s West Palm Beach — Donald Trump, the president-elect, threatened a group of nine countries with 100% tariffs on Saturday if they did anything to weaken the US currency.
The nations in the so-called BRIC alliance—Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates—were the targets of his warning.
In addition to a number of additional nations expressing interest in joining, Turkey, Azerbaijan, and Malaysia have submitted applications to join.
Members of the alliance and other developing countries say they are tired of America controlling the global financial system,
Despite the fact that the U.S. dollar is by far the most widely used currency in international trade and has withstood previous challenges to its supremacy.
Major commodities like oil are still mostly purchased and sold in dollars, and the IMF estimates that the dollar accounts for around 58% of global foreign currency reserves.
However, BRICS’ increasing GDP share and their intention to trade in non-dollar currencies, or “de-dollarization,” pose a challenge to the dollar’s hegemony.
“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 and should expect to say goodbye to selling into the wonderful U.S. Economy,” Trump stated in a post on Truth Social.
Russian President Vladimir Putin called the U.S. a “big mistake” and accused them of “weaponizing” the dollar at a BRIC conference in October.
Putin said at the time that “it’s not us who refuse to use the dollar.” But what can we do if they won’t let us work? We have no choice except to look for alternatives.
In particular, Russia has advocated for the development of a new payment system that would provide a substitute for SWIFT, the international bank messaging network, and enable Moscow to trade with allies while evading Western sanctions.
Trump said that any nation that attempts to replace the U.S. currency in international commerce “should wave goodbye to America” since there is “no chance” that the BRIC nations would do so.
According to research, there is no immediate danger to the U.S. dollar’s position as the main reserve currency of the world.
The dollar is “secure in the near and medium term” and will continue to dominate other currencies, according to an Atlantic Council model that evaluates its status as the main global reserve currency.
Trump’s most recent tariff threat follows his earlier threats to impose 25% tariffs on all imports from Canada and Mexico and an extra 10% tax on Chinese products.
In an effort to pressure the nations to take more action to stop the flow of narcotics and illegal immigrants into the United States. In a subsequent phone conversation,
Mexican President Claudia Sheinbaum expressed her confidence on Thursday that a trade war with the United States may be avoided. After meeting with Trump,
Canadian Prime Minister Justin Trudeau left for home on Saturday without receiving any guarantees that the president-elect will renounce the imposed penalties on Canada.