US President-elect Donald Trump has issued a strict warning, threatening 100 percent tariffs on a coalition of nations in the BRIC alliance if they want to challenge the dominance of the US dollar. The alliance consists of China, India, Brazil, Russia, Egypt, South Africa, Iran, and the United Arab Emirates, and has been advocating alternatives to the use of the dollar in global trade. Additional countries like Malaysia, Turkey, and Azerbaijan have applied for membership and many other countries have also shown interest in joining the group.
US Dollar’s supremacy faces challenges
The US dollar has been the cornerstone of global commerce for a long time and continues to be positioned as the world’s most widely used currency. However, members of the BRICS alliance as well as from the developing nations expressed frustration as they believe that America has outsized control over the global financial system.
In a post on Truth Social, Trump expressed his dissatisfaction stating, ‘’We need a commitment from these countries that they won’t create a new currency for BRICS, nor support any other currency to replace the mighty US Dollar or they will face 100% Tariffs, and should expect to say goodbye to trading into the wonderful US Economy.’’
BRICS Nations look for alternatives
At a recent summit, Russian Vladimir Putin blamed the United States of America for ‘weaponizing’’ the dollar, terming it as a big mistake. Putin highlighted that Russia is not choosing to abandon the dollar but is compelled to look for other options because of US restrictions. ‘’It’s not us who don’t want to utilize dollars. But if they don’t let us work, what can we do? We are bound to search for another option,’’ he mentioned as per the AP report.
Russia has been especially vocal in supporting a new global payment system independent of SWIFT, the dominant bank messaging network to avoid Western sanctions. This will help Russia in facilitating trade with other allied nations.
In response, Trump downplayed the potential chance of the BRIC bloc to replace the US dollar in global trade. He reasserted that there was no chance that these nations could overturn the dollar and threatened that any country trying to take such steps ‘’wave goodbye to America.’’
As the US struggles with challenges to its financial dominance, Trump’s reaction underlines the growing tensions in the global economic landscape.
(With inputs from AP)