Currency War Hots Up! Donald Trump Threatens BRICS Nations if They Create or Back Other Currencies
Donald Trump: In a recent statement, US President-elect Donald Trump issued a harsh warning to the BRICS nations (Brazil, Russia, India, China, and South Africa) and their allies, including countries like Iran, Egypt, Ethiopia, and the UAE. He threatened to impose 100% tariffs on these nations if they attempt to create or support a currency that could replace the US dollar in global trade.
Trump made the threat on his social media platform, Truth Social, stating that the BRICS countries should provide a formal promise not to back any currency to challenge the dominance of the US dollar. He warned that if they do, they would face severe trade consequences, including losing access to the US market, one of the largest in the world.
BRICS Nations Considering Currency Alternatives
The BRICS group has been considering ways to reduce reliance on the US dollar. Discussions at their recent summit in Kazan, Russia, focused on promoting local currencies and reducing the use of the dollar in international transactions. Russian President Vladimir Putin criticized the US for using the dollar as a weapon, making it harder for countries to engage in trade. However, Putin clarified that BRICS is not planning to create a new currency or develop an alternative to the global payment system, SWIFT, at this time.
The Potential of a BRICS Currency
While the idea of a shared BRICS currency has been discussed, it is not yet a concrete plan. Supporters argue that a BRICS currency could help protect member countries from the effects of US sanctions and the volatility of American monetary policies. However, the group’s current financial platforms, like the New Development Bank, focus on sustainable development and financial stability rather than establishing a new currency.
US Dollar’s Dominance in Global Trade
Despite these discussions, the US dollar continues to dominate global trade. Research by the Atlantic Council shows that the dollar still makes up around 58% of the world’s foreign exchange reserves. Major commodities, such as oil, are primarily traded in dollars, reinforcing its stronghold in international finance.
Donald Trump’s Threat of 100% Tariffs
Trump’s statement also outlined his intention to impose 100% tariffs on BRICS nations and their allies if they attempt to undermine the US dollar. The threat of tariffs could have a profound impact on the global economy, especially for countries heavily reliant on trade with the US. This move further escalates the ongoing currency war between the US and the BRICS nations, making it clear that Trump is willing to use aggressive economic policies to maintain the dollar’s global dominance.
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