- greensea
- 21 Jan 2025 09:01 AM
- #Global News
Trump’s Warning to BRICS
On January 20, after being sworn in as the 47th President of the United States, Donald Trump issued a strong warning to BRICS nations regarding their ongoing de-dollarization initiatives. During a press meet in the Oval Office, he declared that BRICS members would face a 100% tariff on trade with the U.S. if they pursued efforts to reduce reliance on the U.S. dollar in global trade.
Trump stated, "If the BRICS nations want to do that, that's OK, but we're going to put at least a 100 percent tariff on the business they do with the United States." He emphasized that this was not a threat but a firm stance aimed at protecting U.S. economic interests.
Background on BRICS
BRICS (Brazil, Russia, India, China, South Africa) was formed in 2009 as an international grouping of emerging economies. In 2023, during the 15th BRICS Summit, the group expanded its membership to include Iran, Egypt, Ethiopia, and the UAE, reflecting its growing influence in global affairs. Unlike other major international organizations, the United States is not part of BRICS.
De-Dollarization Efforts
In recent years, some BRICS members, particularly Russia and China, have taken steps to reduce their reliance on the U.S. dollar in trade and financial transactions. These efforts include exploring the creation of a shared BRICS currency and promoting settlements in national currencies. Russian President Vladimir Putin has been a vocal proponent of these measures, emphasizing the importance of de-dollarization to enhance economic sovereignty.
During the 15th BRICS Summit, Putin highlighted the need to expand the use of national currencies in trade and strengthen cooperation among member nations' financial systems.
India's Neutral Position
India has remained cautious about de-dollarization. Reserve Bank of India Governor Shaktikanta Das clarified in late 2024 that India is not pursuing a de-dollarization strategy. Instead, the focus is on de-risking domestic trade from geopolitical upheavals. Das stressed that reducing reliance on the dollar is not on India's agenda, aligning with the nation's broader policy of maintaining economic stability and neutrality.
Trump’s Economic Agenda
Trump's comments reflect his administration's broader economic strategy of leveraging tariffs and trade policy to protect U.S. interests. His remarks suggest that he views de-dollarization as a direct challenge to U.S. economic dominance. By threatening punitive tariffs, Trump aims to dissuade BRICS nations from moving forward with these efforts.
He added, "They have us over a barrel? No, we have them over a barrel. And there's no way they're going to be able to do that."
Geopolitical Implications
Trump's warning highlights potential friction between the U.S. and BRICS nations. If BRICS members continue to advance de-dollarization, it could lead to increased economic tensions and possible retaliatory measures from the U.S. Such developments could reshape global trade dynamics, with significant implications for currency markets and international economic relations.
Trump's statements underscore his administration's commitment to safeguarding the dollar's role in global trade. While BRICS nations like Russia and China push for alternatives, India's neutral stance indicates a complex dynamic within the group. The confrontation over de-dollarization could become a defining issue in U.S.-BRICS relations during Trump's tenure as president.
