President-elect Donald Trump recently issued a stern warning to nine countries within the BRICS alliance, threatening to impose a 100% tariff on their goods if they attempt to undermine the U.S. dollar’s dominance in global trade. The countries targeted by this threat include Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates. Additionally, Turkey, Azerbaijan, and Malaysia have applied for membership, with several other nations expressing interest in joining the bloc.
Despite the U.S. dollar’s continued supremacy as the global reserve currency—accounting for about 58% of the world’s foreign exchange reserves, according to the IMF—the rise of the BRICS alliance has led to growing concerns about its potential to challenge U.S. economic influence. These countries have voiced frustration with the overwhelming role the U.S. plays in the global financial system, with many pushing for alternatives to the dollar.
Trump’s comments were made via a post on Truth Social, where he demanded that BRICS countries pledge not to create a new currency or back any other alternative to the U.S. dollar. He warned that failure to comply would result in 100% tariffs, causing those nations to “say goodbye” to access to the U.S. market.
The threat comes as BRICS leaders increasingly advocate for “de-dollarization”—a movement to reduce reliance on the U.S. dollar in international trade. At an October summit, Russian President Vladimir Putin criticized the U.S. for “weaponizing” the dollar, calling it a “big mistake.” He argued that Russia and other nations were being forced to find alternatives to the dollar due to Western sanctions and trade restrictions.
Russia, in particular, has pushed for the development of a new payment system to bypass SWIFT, the global bank messaging network, in an effort to ease trade restrictions and circumvent U.S. financial sanctions.
While Trump asserts that there is “no chance” BRICS will successfully replace the U.S. dollar in global trade, the growing economic influence of the bloc and its de-dollarization efforts pose a significant challenge to the status quo. However, research from the Atlantic Council suggests that the U.S. dollar’s position as the primary global reserve currency remains secure in the near and medium term, with no immediate threat of replacement.
Trump’s tariff threat comes on the heels of previous warnings, including his proposals for a 25% tariff on all imports from Mexico and Canada, and an additional 10% tax on goods from China. These threats were intended to pressure these countries into taking stronger action to curb illegal immigration and drug trafficking. However, after discussions with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau, there has been no indication that these tariff threats will be rescinded.
In the broader context of U.S. trade relations, these developments reflect ongoing tensions between the U.S. and various global powers, as nations grapple with the implications of the dollar’s dominant position and the evolving landscape of international trade.
As the global financial landscape continues to evolve, the U.S. remains steadfast in its commitment to maintaining the dominance of the dollar. While BRICS countries push for alternatives, the U.S. dollar’s central role in international trade and finance remains unchallenged in the near future. Trump’s latest threat underscores the ongoing geopolitical tensions and the significant stakes involved in the world’s economic order. How these nations respond in the coming months could reshape the future of global trade and financial systems.