President-elect Donald Trump on Saturday threatened 100% tariffs against the group of nine countries if they act against the US dollar.
His threat was directed at the so-called BRIC alliance, which includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates.
Turkey, Azerbaijan and Malaysia have applied for membership and several other countries have expressed interest in joining.
Although the United States dollar is the most used currency in world trade and has survived past problems, members of the bloc and other developing countries say they are tired of America’s problem. governance of the global financial system.
The dollar represents about 58% of the world’s foreign exchange, according to the IMF and major commodities such as oil are still bought and sold using dollars. The dominance of the dollar is under threat, with the growth of BRICS’ share of GDP and the alliance’s intention to trade in non-dollar currencies – a process known as currency devaluation.
Trump, in the Social Truth post, said: “We want a commitment from these countries that they will not create new BRICS currencies, or return other currencies to replace the strong US Dollar or, they will face 100% Tariffs, and I hope to say goodbye and sell to the US Economy nice.”
At the BRIC summit in October, Russian President Vladimir Putin accused the US of “using” the dollar and described it as a “big mistake.”
“We are not the ones who refuse to use the dollar,” Putin said at the time. But if they don’t let us work, what can we do? We are forced to look for alternatives. “
Russia has particularly pushed for a new payment system that would provide an alternative to international banking, SWIFT, and allow Moscow to avoid Western sanctions and trade with its partners.
Trump said there is “no chance” the BRIC will replace the US dollar in world trade and any country that wants that to happen “should say goodbye to America.”
Research shows that the role of the US dollar as the world’s leading currency is not under threat any time soon.
An An example of the Atlantic Council which looks at the dollar’s place as the world’s leading currency says the dollar is “safe in the short term” and continues to dominate other currencies.
Trump’s latest threat comes after he threatened to impose a 25% tariff on all imports from Mexico and Canada, as well as an additional 10% tariff on imports from China, as a way to pressure those countries to do more to stop the flow of illegal immigrants. . drugs in the US
He has since had a phone call with Mexican President Claudia Sheinbaum, who said Thursday he is confident tariff war with the United States can be avoided. Canadian Prime Minister Justin Trudeau he returned home on Saturday after meeting with Trump, with no confirmation that the president-elect would return to Canada.
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