Trump threatens BRICS with 100% tariffs if they develop their own currency
The economic bloc has proposed the idea, which could significantly weaken the dollar, the current dominant currency for international oil transactions.
Last BRICS summit in Kazan, Russia.
President-elect Donald Trump announced that he will impose tariffs of up to 100% on the BRICS bloc if these countries develop their own alternative currency to the dollar.
The BRICS alliance is a trading bloc of emerging and developing economies comprising Brazil, Russia, India, China, South Africa, which are the original members, in addition to Egypt, Ethiopia, Iran and the United Arab Emirates.
The trade alliance seeks to establish itself as a major global alternative to the Atlantic economic bloc, which includes the United States, Commonwealth nations, and the European Union. President-elect Trump posted on social media "The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER.”
"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," he added.
This statement comes after the BRICS summit in Kazan, Russia, where member countries of that group discussed how to boost transactions in currencies other than the U.S. dollar and strengthen local currencies.
In Kazan in October, Moscow expressed that it was giving up for now on the creation of a common currency of the bloc, considering that such an idea was not yet "mature."
Vladamir Putin claimed that BRICS is “not considering” creating a unified currency at this time.
With Donald Trump set to take office, the country is expected to adopt a more protectionist stance in its economic policy. Tariffs and the return of manufacturing jobs to the United States have been key pillars of Trump's campaign and proposals. It remains to be seen, however, whether he can implement these measures while also delivering on his promises to combat inflation.
The dollar is currently the most widely used currency for international transactions, including oil, which significantly strengthens its value. If the BRICS countries were to develop their own currency for global trade, it could weaken the U.S. dollar. This is particularly true as several BRICS nations, such as the United Arab Emirates, are major oil producers.
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