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Politics
TRUMP THREATENS 100% TARIFF ON THE BRIC BLOC OF NATIONS IF THEY ACT TO UNDERMINE
US DOLLAR
FILE - President-elect Donald Trump speaks during a meeting with the House GOP
conference, Nov. 13, 2024, in Washington. (Allison Robbert/Pool via AP, File)
Read More
By FATIMA HUSSEIN
Updated [hour]:[minute] [AMPM] [timezone], [monthFull] [day], [year] Updated
9:16 PM CET, November 30, 2024
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Print
WEST PALM BEACH, Fla. (AP) — President-elect Donald Trump on Saturday threatened
100% tariffs against a bloc of nine nations if they act to undermine the U.S.
dollar.
His threat was directed at countries in the so-called BRIC alliance, which
consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran
and the United Arab Emirates.
Turkey, Azerbaijan and Malaysia have applied to become members and several other
countries have expressed interest in joining.
While the U.S. dollar is by far the most-used currency in global business and
has survived past challenges to its preeminence, members of the alliance and
other developing nations say they are fed up with America’s dominance of the
global financial system.
The dollar represents roughly 58% of the world’s foreign exchange reserves,
according to the IMF and major commodities like oil are still primarily bought
and sold using dollars. The dollar’s dominance is threatened, however, with
BRICS’ growing share of GDP and the alliance’s intent to trade in non-dollar
currencies — a process known as de-dollarization.
Trump, in a Truth Social post, said: “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.”
Related Stories
Trump isn't back in office but he's already pushing his agenda and negotiating
with world leaders
Gold is suddenly not so glittery after Trump's White House victory
The G20 has 'shock absorbers' to deal with Trump's return as US president, South
Africa says
At a summit of BRIC nations in October, Russian President Vladimir Putin accused
the U.S. of “weaponizing” the dollar and described it as a “big mistake.”
“It’s not us 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 search for alternatives.”
Russia has specifically pushed for the creation of a new payment system that
would offer an alternative to the global bank messaging network, SWIFT, and
allow Moscow to dodge Western sanctions and trade with partners.
Trump said there is “no chance” BRIC will replace the U.S. dollar in global
trade and any country that tries to make that happen “should wave goodbye to
America.”
Research shows that the U.S. dollar’s role as the primary global reserve
currency is not threatened in the near future.
An Atlantic Council model that assesses the dollar’s place as the primary global
reserve currency states the dollar is “secure in the near and medium term” and
continues to dominate other currencies.
Trump’s latest tariff threat comes after he threatened to slap 25% tariffs on
everything imported from Mexico and Canada, and an additional 10% tax on goods
from China, as a way to force the countries to do more to halt the flow of
illegal immigration and drugs into the U.S.
He has since held a call with Mexican President Claudia Sheinbaum, who said
Thursday she is confident that a tariff war with the United States can be
averted. Canadian Prime Minister Justin Trudeau returned home Saturday after
meeting Trump, without assurances the president-elect will back away from
threatened tariffs on Canada.
FATIMA HUSSEIN
Hussein reports on the U.S. Treasury Department for The Associated Press. She
covers tax policy, sanctions and any issue that relates to money.
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