Trump Issues Warning of ‘100% Tariffs’ if BRICS Countries Don’t Uphold Dollar Commitment

US President-elect Donald Trump has warned the Brics nations that he demands guarantees they will not seek to create a new currency as a substitute for the US dollar. He reiterated his threats of implementing a 100% tariff.

“The idea that the Brics countries are trying to move away from the dollar while we remain passive is over,” Trump stated in a post on his Truth Social network on Saturday.

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Read: Brics+ countries are determined to trade in their own currencies

“We require a commitment from these nations that they will not create a new Brics currency or endorse any other currency to replace the dominant US Dollar. Should they ignore this demand, they can expect 100% tariffs and say goodbye to the thriving US Economy,” he added.

During his campaign, Trump promised to impose heavy penalties on nations looking to reduce their reliance on the US dollar.

His tariff threats have taken on greater relevance as the president-elect prepares to take office in January.

Trump and his economic team are exploring various strategies to penalize both allies and adversaries engaged in trade using currencies outside the dollar. Potential strategies include export controls, allegations of currency manipulation, and trade tariffs, according to sources familiar with the discussions.

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Trump has consistently stressed his intention for the US dollar to maintain its status as the world’s reserve currency, declaring in a March interview with CNBC that he “would not allow countries to abandon the dollar” as it would be “harmful to our nation.”

The Brics nations—Brazil, Russia, India, China, and South Africa—discussed the issue of de-dollarization at a 2023 summit in Johannesburg.

Opposition to the dollar’s dominance gained traction in 2022 when the US spearheaded economic sanctions against Russia.

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Trump’s economic advisers have specifically noted the necessity to address the Brics initiative.

Listen/read: Real estate investing in Africa and the transition from the mighty dollar

“There is no chance that the Brics will replace the US dollar in global trade, and any nation attempting to do so should bid farewell to America,” Trump asserted on Saturday.

The president-elect has already rattled global markets ahead of his second term with threats to impose a 10% tariff on goods from China and 25% tariffs on all products from Mexico and Canada if those countries do not take stronger measures to curb the influx of illegal drugs and undocumented migrants into the US.

Canadian Prime Minister Justin Trudeau met with Trump on Friday to discuss trade and border matters in an effort to diffuse tensions between the two allied countries following the tariff warning.

© 2024 Bloomberg

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