Donald Trump warns BRICS nations of 100% tariffs over potential dollar replacement efforts

Donald Trump, the US President-elect, has issued a warning of 100% tariffs against a group of nine countries should they develop a currency intended to compete with the US dollar. On Saturday, Trump stated on social media, “The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER.” The BRICS alliance includes major global powers China and Russia, in addition to Brazil, India, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates. Throughout his US election campaign, Trump advocated for the implementation of extensive tariffs. In recent days, he has intensified his warnings of significant import duties. This most recent statement from Trump, who is scheduled to assume office on 20 January next year, targeted the BRICS, a coalition primarily composed of developing economies. Prominent political figures in Brazil and Russia have proposed the establishment of a BRICS currency with the aim of diminishing the US dollar’s prevailing role in international commerce. However, internal discord has impeded any advancement on this front. Trump conveyed on his Truth Social platform, “We require a commitment from these countries that they will neither create a new Brics currency nor back any other currency to replace the mighty US dollar or they will face 100% tariffs and should expect to say goodbye to selling into the wonderful US economy.” He further added, “They can go find another sucker.” Nevertheless, some individuals aligned with Trump have indicated that his recent declarations serve as negotiation strategies, intended as an initial offer rather than a definitive pledge. When questioned about the president-elect’s suggested application of tariffs, Republican Senator Ted Cruz highlighted the “importance of leverage.” The Texan remarked on CBS News’ Face the Nation on Sunday, “You look at the threat of tariffs against Mexico and Canada, immediately has produced action.” On Friday, Canadian Prime Minister Justin Trudeau undertook an unannounced visit to Trump’s Mar-a-Lago estate in Florida, apparently to avert a possible 25% tariff on Canadian products destined for the US. Scott Bessent, Trump’s chosen candidate for Treasury Secretary, had previously put forth the idea that the president-elect’s warnings of substantial tariff increases formed part of his negotiation approach. Prior to his nomination for the position, Bessent commented on Trump in an interview with the Financial Times, stating, “My general view is that at the end of the day, he’s a free trader.” He added, “It’s escalate to de-escalate.” A tariff constitutes a domestic tax applied to imported goods upon their entry into a nation, calculated in proportion to the import’s value. For instance, a car valued at $50,000 imported into the US, if subject to a 25% tariff, would incur a $12,500 fee. Tariffs are a fundamental element of Trump’s economic outlook; he views them as a mechanism for fostering US economic growth, safeguarding employment, and increasing tax income. He has previously asserted that these taxes are “not going to be a cost to you, it’s a cost to another country.” Economists widely consider this assertion to be inaccurate. The fee is directly borne by the domestic company importing the merchandise, rather than the foreign entity exporting it. Therefore, in this context, it represents a direct tax paid by US-based firms to the US government. During his initial term in office, Trump implemented several tariffs, many of which have been maintained by his successor, President Joe Biden. Economic analyses indicate that the majority of the financial impact was ultimately absorbed by American consumers. Copyright 2024 BBC. All rights reserved. The BBC bears no responsibility for the content found on external websites. Information regarding our policy on external linking is available.