President-elect Donald Trump has issued a stark warning to BRICS nations over their ongoing efforts to reduce reliance on the U.S. dollar. Trump threatened to impose a 100% tariff on goods from BRICS members if they move forward with plans to establish a rival currency or abandon the dollar as the dominant international reserve currency.
BRICS, a nine-nation bloc consisting of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the UAE, has been at the forefront of a global “de-dollarization” movement. Members aim to strengthen trade using local currencies and have discussed creating a shared currency to rival the dollar.
In a Nov. 30 post on Truth Social, Trump stated, “The idea that the BRICS countries are trying to move away from the dollar while we stand by and watch is over.” He vowed to protect U.S. economic dominance by leveraging tariffs to discourage anti-dollar moves.
While some analysts argue that BRICS poses a limited immediate threat to the dollar, Trump views any attempt to undermine the currency as a national security risk. At a September rally, Trump emphasized, “We cannot lose [reserve currency dominance]. You’ll go to Third World status in this country if we lose it.”
Despite the rhetoric, economists are skeptical of BRICS’ ability to dethrone the dollar. Currently, the U.S. dollar accounts for 60% of global foreign exchange reserves and 88% of international trade transactions, according to the IMF and the Bank for International Settlements.
Economist Peter St. Onge dismissed BRICS’ potential, saying their internal trade represents only 1% of global trade and that their economic coordination is limited. Other analysts, including Michael Wan of MUFG Research, have pointed out that while BRICS has discussed a unified currency, recent summits have downplayed the issue, reflecting practical challenges in implementation.
Currencies of major BRICS nations, such as China’s yuan and India’s rupee, have weakened against the dollar, further undermining confidence in their ability to lead a global currency shift.
Trump’s use of tariffs to protect U.S. interests is not new. The president-elect has promised to expand tariffs on Mexico, Canada, and China to address issues ranging from border security to the drug trade. Trump’s stance on BRICS aligns with his broader vision of using “tariff diplomacy” to secure American economic and strategic priorities.
While Kremlin spokesperson Dmitry Peskov warned that Trump’s threats could backfire by accelerating de-dollarization, analysts argue that BRICS faces significant hurdles in challenging dollar hegemony.
The U.S. dollar remains the cornerstone of the global financial system, supported by the Federal Reserve’s monetary policy, a robust U.S. Treasury market, and continued demand for dollar-backed reserves. BRICS leaders continue to advocate for reducing dollar reliance, but significant obstacles, including internal economic disparities and geopolitical tensions, limit their progress.
Trump’s aggressive stance on tariffs underscores his administration’s commitment to safeguarding U.S. economic leadership and ensuring the dollar retains its global dominance.
