Trump’s tariff warning as BRICS challenges dollar dominance

US President-elect Donald Trump has warned BRICS nations of 100% tariffs if they pursue alternatives to the US dollar in global trade. Experts deem the threat symbolic, highlighting potential harm to US consumers and global trade.

US President-elect Donald Trump has threatened the nine-member BRICS bloc with 100% tariffs if they proceed with plans to challenge the US dollar’s global dominance by developing alternative currencies. The bloc includes India, Brazil, Russia, China, South Africa, Iran, Egypt, Ethiopia, and the UAE.

Trade experts have criticized the move as both counterproductive and impractical. BRICS nations are exploring options such as creating a new currency, akin to the euro, or supporting emerging currencies to gradually reduce reliance on the dollar. Trump, who previously labeled India a “tariff king,” has now hinted at adverse tariff measures against New Delhi as part of this broader threat.

Emerging economies view dollar dominance as a barrier to increasing their share in global trade and reaping its economic benefits. During the recent BRICS Summit in Kazan, Russia, members emphasized trade settlements in local currencies, strengthening correspondent banking networks, and advancing the BRICS Cross-Border Payments Initiative (BCBPI). Officials noted that concrete measures might follow further discussions.

Ajay Srivastava, founder of the Global Trade Research Initiative, remarked, “Trump’s threat to impose 100% tariffs on countries adopting a BRICS currency is unrealistic and more symbolic than practical. Tariffs of this scale would harm US consumers by raising prices on imports, disrupt global trade, and risk retaliation from key trading partners.”

While the dollar dominates 90% of global transactions, other currencies like the euro, yen, and pound are integral to global commerce. Srivastava added, “The proposed BRICS currency is simply an extension of these existing alternatives, aiming to facilitate trade among member countries and reduce over-reliance on a single currency.”

The US’s actions, such as restricting access to the SWIFT network, have pushed countries to seek dollar alternatives. “By blocking countries like Russia and Iran from accessing SWIFT, the US has effectively weaponized the global financial infrastructure,” Srivastava noted.