Trump Demands ‘Commitment’ From BRICS Nations on Using Dollar
(Bloomberg) -- US President-elect Donald Trump warned the so-called BRICS nations that he would require commitments that they would not move to create a new currency as an alternative to using the US dollar and repeated threats to levy a 100% tariff.
“The idea that the BRICS Countries are trying to move away from the dollar while we stand by and watch is OVER,” Trump said in a post to his Truth Social network on Saturday.
“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 will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy,” he added.
Trump on his campaign trail pledged that he would make it costly for countries to move away from the US dollar. And he’s threatened to use tariffs to ensure they complied. Saturday’s threat took on new relevance as the president-elect prepares to retake power in January.
Trump and his economic advisers have been discussing ways to punish allies and adversaries alike who seek to engage in bilateral trade in currencies other than the dollar. Those measures include considering options such as export controls, currency manipulation charges and levies on trade, according to people familiar with the matter.
Trump has long stressed that he wants the US dollar to remain the world’s reserve currency, saying in a March interview with CNBC that he “would not allow countries to go off the dollar” because it would be “a hit to our country.”
The BRICS nations discussed the issue of de-dollarization at a summit in 2023. Backlash against the dollar’s dominance gained traction in 2022 when the US led efforts to impose economic sanctions on Russia.
While some potential dollar rivals such as the Chinese yuan have already made inroads, that has often happened at the expense of currencies other than the dollar.
Despite the group’s rhetoric, the infrastructure that backs the dollar, such as the cross-border payment system, will likely give the US currency a decisive edge for decades to come.
Evidence of this emerged during the bloc’s October meeting in Kazan hosted by Russian President Vladimir Putin, a champion of reducing the international role of the dollar. Organizers for the meeting encouraged attendees to bring US dollars or euros with them as non-Russian Mastercard or Visa cards don’t work in the country.
Economic advisers to Trump and his campaign have spoken in particular about targeting the BRICS effort.
Earlier: Trump Aides Discuss Penalties for Nations That De-Dollarize
“There is no chance that the BRICS will replace the U.S. Dollar in International Trade, and any Country that tries should wave goodbye to America,” Trump said Saturday.
The president-elect has already rattled world markets ahead of his second term with threats to levy an additional 10% tariffs on goods from China and 25% tariffs on all products from Mexico and Canada if those countries do not do more to stem the flow of illegal drugs and undocumented migrants across US borders.
Canadian Prime Minister Justin Trudeau met with Trump on Friday to discuss trade and border issues in a bid to tamp down tensions between the two allied nations after the tariff threat.
But other nations may consider ways to mitigate the Trump tariffs on their economies. China could allow its yuan to depreciate by as much as 10-15% in response to any trade war unleashed by Trump, according to JPMorgan Chase & Co. The bank sees a 5% average depreciation in emerging-market currencies over the first half of 2025.
