The President-elect of the United States, Donald Trump, has warned the Brics countries that he requires guarantees they will not attempt to create a new currency as a substitute for the US dollar. He reaffirmed his threats of imposing a 100% tariff should this occur.
“The idea that the Brics nations are trying to distance themselves from the dollar while we remain passive is over,” Trump stated in a post on his Truth Social platform on Saturday.
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Read: Brics+ countries are committed to trading in their own currencies
“We expect these nations to commit to not creating a new Brics currency or endorsing any other currency to replace the dominant US Dollar. Should they fail to meet this condition, they can anticipate 100% tariffs and will be cutting ties with the thriving US Economy,” he added.
During his campaign, Trump pledged to impose heavy consequences on nations that seek to move away from the US dollar.
His tariff threats have taken on greater importance as he prepares to take office in January.
Trump and his economic advisors have been exploring potential penalties for both allies and adversaries utilizing currencies other than the dollar in trade. Possible actions include export restrictions, claims of currency manipulation, and trade tariffs, as per sources familiar with the discussions.
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Trump has continually highlighted his intent for the US dollar to maintain its status as the world’s reserve currency, declaring in a March CNBC interview that he “would not allow countries to forsake the dollar” as it would be “harmful to our nation.”
The Brics nations—Brazil, Russia, India, China, and South Africa—discussed the issue of de-dollarization at a summit held in Johannesburg in 2023.
Pushback against the dollar’s dominance gained traction in 2022 when the US led sanctions against Russia.
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Trump’s economic advisors have specifically highlighted the necessity of addressing the Brics initiative.
Listen/read: Real estate investment in Africa and the shift from the mighty dollar
“It is impossible for the Brics to replace the US dollar in international trade, and any nation attempting this should prepare to say goodbye to America,” Trump asserted on Saturday.
The president-elect has already unsettled international markets ahead of his second term with threats of an additional 10% tariff on goods from China and 25% tariffs on all products from Mexico and Canada unless these countries take more decisive action against illegal drugs and undocumented migration into the US.
Canadian Prime Minister Justin Trudeau met with Trump on Friday to discuss trade and border issues, aiming to mitigate tensions between the two allied nations following the tariff threats.
© 2024 Bloomberg
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