President-elect Trump warned the BRICS countries that he would require them to commit not to create a new currency to replace the dollar and repeatedly threatened to impose a 100% tariff.
Trump posted on his social media site Truth Social last Saturday saying: "The idea that BRICS countries can move away from the dollar while we sit by is over. We need these countries to commit that they will neither create a new BRICS currency nor support any other currency to replace the strong dollar, or they will face a 100% tariff and should be ready to stop selling products to the wonderful US economy."
Trump promised during his campaign that he would make countries pay a high price for moving away from the dollar. He also threatened to impose tariffs to ensure these countries keep their promises. With Trump preparing to return to power in January, last Saturday's threat took on new meaning.
Trump and his economic advisers have been discussing how to punish allies and adversaries that attempt to conduct bilateral trade in currencies other than the dollar. According to insiders, these measures include considering export controls, currency manipulation fees, and trade tariffs.
Trump has long emphasized that he wants the dollar to remain the world's reserve currency. In a March interview with CNBC, he stated that he "will not allow countries to move away from the dollar" because it would "hurt our country."
The BRICS countries discussed the issue of de-dollarization at a summit in 2023. In 2022, the US led the economic sanctions against Russia, leading to an increasing outcry against the dollar's dominance. While some potential dollar rivals have made progress, it often comes at the expense of currencies other than the dollar.
Despite the organization's strong rhetoric, the infrastructure supporting the dollar, such as cross-border payment systems, is likely to provide a decisive advantage for the US currency in the coming decades. Russian President Putin is an advocate for undermining the dollar's international role, and evidence of this emerged during a meeting he hosted in Kazan in October. Meeting organizers encouraged attendees to bring dollars or euros, as non-Russian MasterCard or Visa cards are unusable in the country.
Trump and his campaign team's economic advisers specifically talked about efforts against the BRICS countries. Trump said last Saturday: "BRICS countries cannot replace the dollar in international trade; any country that tries to replace the dollar should wave goodbye to the US."
He has already sent a warning to the world market before his second term begins, stating that if Mexico and Canada do not take further steps to stop illegal drugs and undocumented immigration across the US border, he will impose a 25% tariff on all products from Mexico and Canada.
Canadian Prime Minister Trudeau met with Trump last Friday to discuss trade and border issues in an effort to ease tensions between the two countries after tariff threats.
But other countries may consider how to mitigate the impact of Trump's tariffs on their economies. JPMorgan estimates that emerging market currencies will depreciate by an average of 5% in the first half of 2025.
Article reposted from: Jinshi Data