Officials including Chinese President Xi Jinping, Russian President Vladimir Putin, and Indian Prime Minister Narendra Modi will attend the BRICS summit in Kazan, Russia, on October 23, 2024.
Alexei Danichev | Reuters
President-elect Donald Trump on Saturday threatened to impose 100% tariffs on the nine-nation bloc if it took action to undermine the U.S. dollar.
His threats were aimed at countries in the so-called BRIC alliance, which consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates.
Türkiye, Azerbaijan and Malaysia have applied for membership, and several other countries have also expressed interest in joining.
Although the U.S. dollar is by far the most used currency in world business and has maintained its prominence through past challenges, members of the Alliance and other developing countries are struggling to maintain control over the U.S. global financial system. He says he is tired of being controlled.
According to the IMF, the dollar accounts for about 58% of the world’s foreign exchange reserves, and major commodities such as crude oil are still primarily bought and sold using the dollar. However, the dollar’s dominance is threatened by the BRICS’ growing share of GDP and the alliance’s intention to trade in non-dollar currencies, a process known as de-dollarization.
“We ask these countries to commit not to create another BRICS currency or support any other currency to replace the mighty US dollar,” Trump said in a post on Truth Social. , face 100% tariffs and should do so.” We’ll be bidding farewell to the great American economy. ”
At the BRIC summit in October, Russian President Vladimir Putin accused the United States of “weaponizing” the dollar, calling it a “big mistake.”
“We are not the ones who refuse to use the dollar,” Putin said at the time. “But what can we do if they don’t let us work? We are forced to look for alternatives.”
Russia is particularly pushing for the creation of a new payment system that would provide an alternative to SWIFT, the global banking messaging network, and allow Russia to circumvent Western sanctions and trade with partners.
President Trump said there was “no chance” that the BRICs would replace the US dollar in global trade, and that countries seeking to do so should “say goodbye to the United States.”
According to the study, the role of the US dollar as the world’s main reserve currency will not be threatened in the near future.
The Atlantic Council’s model, which assesses the dollar’s status as a major global reserve currency, says the dollar is “safe in the short and medium term” and continues to dominate other currencies.
President Trump’s latest tariff threat is to impose 25% tariffs on imports from Mexico and Canada and imports from China as a way to force countries to do more to stop illegal immigration and its flow into Canada. It comes after it threatened to impose an additional 10% tariff on goods. bring drugs into the United States
He later spoke by phone with Mexican President Claudia Sheinbaum, who said Thursday she was confident a tariff war with the United States could be avoided. Canadian Prime Minister Justin Trudeau returned home Saturday after meeting with President Trump, but there was no guarantee that the president-elect would back away from threatened tariffs on Canada.
