U.S. President-elect Donald Trump has issued a strong warning to the BRICS countries, threatening severe economic consequences if they move forward with plans to establish a new currency. His remarks come amid growing discussions within the BRICS bloc comprising Brazil, Russia, India, China, and South Africa about reducing their reliance on the U.S. dollar for trade. The proposal for a new currency, which would enable BRICS countries to bypass the U.S. dollar in their transactions, is seen by many as a move to counterbalance the U.S.’s dominance in the global financial system.
Trump’s comments, made on X (formerly Twitter), were unequivocal. He stated that the U.S. would no longer stand by and allow BRICS countries to push for a currency alternative to the U.S. dollar. “The idea that the BRICS countries are trying to move away from the Dollar while we stand by and watch is over,” Trump declared. He emphasized that any attempts to create a new BRICS currency or support an alternative to the U.S. dollar would result in “100% tariffs” on the affected nations’ exports to the United States.
This threat comes in the context of the BRICS countries’ ongoing exploration of ways to reduce the economic and political influence of the U.S. in global trade. The move to create a common currency or use their national currencies for trade aims to lower transaction costs and avoid the impact of U.S. monetary policy, especially for countries facing Western sanctions, such as Russia and Iran.
Brazilian President Luiz Inácio Lula da Silva has been a key proponent of this shift, proposing the idea of a common South American currency to lessen the region’s dependency on the U.S. dollar. The broader BRICS vision includes facilitating trade between member countries using their local currencies, as opposed to relying on the U.S. dollar, which has long been the backbone of international trade and finance.
The BRICS nations are seeking to build alternatives to the U.S.-dominated financial system, which they argue has become increasingly biased against non-Western countries. Through the establishment of alternative banking networks and the use of their national currencies for cross-border transactions, BRICS hopes to enhance economic sovereignty. This would particularly benefit nations like Russia, China, and Iran, who have faced sanctions from the U.S. and its allies. By circumventing the U.S. dollar, these countries could potentially shield their economies from the impact of Western sanctions.
However, Trump’s response is clear: the U.S. will not tolerate any challenge to the supremacy of its currency in international trade. In his statement, he asserted that any country attempting to replace the U.S. dollar with another currency should “wave goodbye to America.” This reflects the immense power that the U.S. dollar wields in the global economy, being the preferred currency for international trade, reserves, and finance.
The potential creation of a BRICS currency would be a significant challenge to the U.S. dollar’s dominant role. Despite its recent efforts to establish such a system, however, the BRICS nations are far from achieving this goal. There are considerable logistical, political, and financial obstacles to creating a unified currency among the diverse economies of Brazil, Russia, India, China, and South Africa. Furthermore, many experts argue that it would take years, if not decades, for such a currency to gain the trust and stability needed to rival the U.S. dollar.
Trump’s threats underscore the lengths to which the U.S. is willing to go to maintain its financial hegemony. While BRICS countries push for greater economic independence, the U.S. is determined to maintain its central role in global trade. With tensions escalating, the future of the dollar’s dominance in international trade is likely to remain a key point of contention in global economic affairs.
As the situation develops, it remains to be seen how BRICS countries will respond to Trump’s threats. While they continue to seek alternatives to the U.S. dollar, it is clear that the U.S. is prepared to use its economic power to protect its interests on the world stage.
