US President-elect Donald Trump has issued a warning to the BRICS nations, comprised of Brazil, Russia, India, China, and South Africa, regarding their potential move to create a new currency as an alternative to the US dollar. Trump emphasized that he would require a commitment from these countries to not develop a new BRICS currency or back any other currency to replace the US dollar. Failure to comply would result in facing 100% tariffs and risking their access to the US economy.
During his campaign, Trump promised to make it costly for countries to move away from the US dollar and has threatened to use tariffs to enforce compliance. As he prepares to take office in January, discussions have been underway to determine punitive measures against countries engaging in bilateral trade using currencies other than the dollar. Trump has been adamant about maintaining the US dollar as the world’s reserve currency, citing potential negative impacts on the US if countries were to shift away from it.
The issue of de-dollarization was discussed by the BRICS nations in 2023, with efforts gaining traction amid tensions arising from US economic sanctions placed on Russia in 2022. Trump’s strong stance on the issue has already caused ripples in global markets, with threats of additional tariffs on goods from China, Mexico, and Canada. The president-elect met with Canadian Prime Minister Justin Trudeau to address concerns and discuss trade and border issues, in an attempt to ease tensions following the tariff threats.
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