President Donald Trump has issued a strong warning to BRICS nations, cautioning them of 100% tariffs if they attempt to supplant the U.S. dollar as the global reserve currency or form their own common currency.
Trump’s admonition is aimed at BRICS countries Brazil, Russia, India, China, and South Africa, along with new BRICS members Egypt, Ethiopia, Iran, and the United Arab Emirates. This comes as these nations continue debates about decreasing their dependency on the U.S. dollar in global trade.
“There is NO CHANCE that BRICS will replace the U.S. Dollar in International Trade, or anywhere else, and any Country that tries should say hello to Tariffs and goodbye to America!” Trump proclaimed.
This statement echoes Trump’s post on November 30, soon after his 2024 presidential election victory, thus demonstrating a consistent position on preserving the dollar’s international supremacy.
However, the Kremlin dismissed Trump’s threats, with spokesperson Dmitry Peskov clarifying that BRICS is not contemplating the creation of a common currency. “The BRICS agenda needs to be better understood by American experts,” Peskov noted. “BRICS is not talking about creating its own currency – it is talking about creating joint investment platforms.”
Further, India’s Foreign Ministry downplayed Trump’s threat, asserting that BRICS decisions are reached by consensus and India does not have a de-dollarization policy. The conversation about increasing national currencies’ usage gained traction after the West imposed sanctions on Russia following its Ukraine invasion.
Russian President Vladimir Putin has accused the U.S. of “weaponizing” the dollar, leading nations to “forced to search for alternatives.”
Trump’s stance has invited criticism from some economists. Peter Schiff opined that BRICS countries are the “suckers” for accepting U.S. fiat currency in return for tangible goods and services.
According to a study by the Atlantic Council’s GeoEconomics Center, the U.S. dollar continues to be the world’s chief reserve currency, with neither the euro nor BRICS nations able to significantly reduce global reliance on the dollar.
The South African government has clarified that while BRICS seeks to bolster correspondent banking networks and develop settlements infrastructure in national currencies, there are no discussions about a common BRICS currency.
Since Western sanctions were imposed on Russia, BRICS economic collaboration has deepened, with member nations exploring alternatives to mitigate their vulnerability to future sanctions. However, India has yet to take any specific steps toward de-dollarization.