US President Donald Trump
By Chris Williams
US President Insists on Dollar Dominance Amid BRICS De-Dollarisation Efforts
Thursday, 31 January 2025 – Washington, D.C. – US President Donald Trump has reiterated his threat to impose 100 percent tariffs on BRICS nations, warning that any move by the bloc to create a rival currency to the US dollar will be met with economic retaliation.
The former president had previously issued similar threats, but on Thursday night, he doubled down on his position through a post on his Truth Social platform.
“The idea that the BRICS Countries are trying to move away from the Dollar, while we stand by and watch, is OVER,” Trump wrote.
“We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs,” he added.The latest warning comes as Trump’s administration nears a February 1 deadline to decide on tariffs against Canada and Mexico, while also considering new trade restrictions on China, a key BRICS member.
Trump’s Hardline Trade Policy Targets BRICS Bloc
The BRICS bloc, consisting of Brazil, Russia, India, China, and South Africa, has been working on long-term plans to reduce dependence on the US dollar in global trade. Discussions on a potential BRICS currency have gained momentum as members explore ways to strengthen financial independence from Western institutions.
Trump’s latest threats highlight growing tensions between the US and BRICS nations, particularly over trade and currency policies. His administration has taken an aggressive stance, seeing BRICS’ economic moves as a direct challenge to US global influence.
• In August 2023, BRICS expanded to include Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE).
• Several BRICS members have been increasing trade settlements in local currencies, bypassing the US dollar.
• China and Russia have been leading de-dollarisation efforts, strengthening financial mechanisms such as the Cross-Border Interbank Payment System (CIPS) to rival the SWIFT global payments network.
Trump’s tariff threats appear aimed at deterring any further BRICS-led financial alternatives to the dollar, asserting that the US will not tolerate economic shifts that undermine its currency’s global dominance.
Upcoming Deadline for Tariffs on Canada, Mexico, and China
Beyond BRICS, Trump is also poised to impose a 25 percent tariff on Canada and Mexico, setting a February 1 deadline for action.
• The move is linked to border security, with Trump demanding both countries take stronger measures to curb illegal immigration into the US.
• He has also tied tariffs to the flow of fentanyl, a synthetic opioid blamed for a surge in US overdose deaths.
“We need real action from our neighbours to stop the flow of illegal migrants and deadly drugs into our country. If they won’t act, we will,” Trump said in a previous statement.In addition to BRICS and North America, Trump has separately warned China that an additional 10 percent tariff could be imposed as soon as February 1, citing:
• Trade imbalances between the two nations.
• China’s alleged role in fentanyl production and trafficking.
China is the largest economy in BRICS and a major trading partner of the US, meaning any tariffs on Chinese goods could further escalate tensions between the two superpowers.
Global Economic Impact of Trump’s Tariff Threats
Should Trump follow through on his threats, global trade relations could shift significantly, with potential consequences including:
1. Retaliatory Tariffs – BRICS nations, especially China and India, may impose countermeasures against US exports, sparking a new trade war.
2. Weakened US-Dollar Influence – The threat of tariffs could push BRICS nations to accelerate de-dollarisation, increasing trade in alternative currencies such as the Chinese yuan, Russian ruble, or Indian rupee.
3. Supply Chain Disruptions – Higher tariffs would increase costs for US consumers and businesses that rely on imports from BRICS nations.
4. Stronger BRICS Alliances – The move could further unify BRICS members in seeking alternative trade routes and economic alliances, potentially deepening ties with nations opposed to US economic policies.
Trump’s aggressive stance on trade policy has long been a defining feature of his administration, with previous tariff battles affecting industries ranging from automobiles and agriculture to technology and finance.
Could BRICS Proceed with a Common Currency?
One of the key reasons behind Trump’s latest threats is the fear of a BRICS currency rivaling the US dollar.
• Russia and China have been leading efforts to develop an alternative global financial system, free from Western control.
• Saudi Arabia and the UAE have already expanded oil trade using the Chinese yuan, signaling a shift away from the petrodollar system.
• India has also increased rupee-based trade deals, avoiding dollar settlements in strategic transactions.
While BRICS has not yet officially launched a common currency, its members are strengthening financial mechanisms that could one day challenge the dollar. Trump’s warnings suggest the US will use economic pressure to prevent such developments.
What Happens Next?
As the February 1 deadline approaches, Trump’s administration faces key decisions on trade penalties affecting BRICS members, Canada, and Mexico.
Potential next steps include:
• Immediate enforcement of tariffs if BRICS members refuse to comply with US demands on currency policies.
• Further diplomatic pressure on Canada and Mexico to tighten border security and curb drug trafficking.
• Expanded sanctions or financial restrictions against BRICS economies seeking to bypass the dollar.
With the global economy still recovering from past trade wars and inflationary pressures, any escalation in tariffs could create volatility in markets worldwide.
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