President-elect Donald Trump has warned of imposing 100% tariffs on BRICS nations if they attempt to create a currency to rival the U.S. dollar, escalating his confrontational stance on global trade.
“The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER,” Trump declared on Truth Social Saturday. His message targeted the bloc of Brazil, Russia, India, China, South Africa, and additional members Iran, Egypt, Ethiopia, and the UAE.
The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER. 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 U.S. Dollar or, they…
— Donald J. Trump (@realDonaldTrump) November 30, 2024
Tariffs as a Negotiation Tool
Trump, who campaigned heavily on trade tariffs, has ramped up such rhetoric since his election. His threats come amid calls from some BRICS leaders to establish an alternative currency to reduce reliance on the U.S. dollar in global trade. However, disagreements within the bloc have slowed any substantial progress.
In a pointed message, Trump demanded a pledge from BRICS nations to abandon plans for a shared currency, warning of punitive tariffs:
“They can go find another sucker,” he wrote.
Allies suggest Trump’s aggressive stance may be a negotiating tactic. Republican Senator Ted Cruz emphasized the importance of leverage in trade deals, pointing to previous threats producing results. “You look at the threat of tariffs against Mexico and Canada—it immediately has produced action,” Cruz said on CBS News.
Escalate to De-escalate?
Trump’s Treasury Secretary pick, Scott Bessent, has echoed this view, describing the approach as “escalate to de-escalate.” Bessent noted Trump’s general preference for free trade but said tariffs were a way to strengthen the U.S. position in negotiations.
This strategy has already drawn responses. Canadian Prime Minister Justin Trudeau made an unexpected visit to Trump’s Mar-a-Lago estate Friday, reportedly to avoid a potential 25% tariff on Canadian goods.
How Tariffs Work
Tariffs are taxes imposed on imports based on their value. For example, a 25% tariff on a $50,000 car would add $12,500 to its cost. Trump has promoted tariffs as a means to protect U.S. jobs, grow the economy, and generate tax revenue.
However, economists widely criticize this view, pointing out that tariffs are paid by U.S. importers, not foreign exporters. Studies from Trump’s first term show these costs were largely passed on to U.S. consumers, undermining claims that tariffs are “not a cost to you, it’s a cost to another country.”
Potential Fallout
If Trump follows through, his proposed 100% tariffs could severely impact trade with BRICS nations, potentially escalating tensions in global markets. The approach highlights his determination to reinforce the dollar’s dominance but risks alienating key trading partners and further complicating international trade relations.
