New York, Dec 1 (IANS) – US President-Elect Donald Trump has issued a stark warning to BRICS countries, threatening 100% tariffs if they proceed with plans to develop a new currency that could challenge the US dollar’s dominance in international trade.
Trump's warning came via a Truth Social post:
"There is no chance that the BRICS will replace the US Dollar in International Trade, and any country that tries should wave goodbye to America."
India Rules Out BRICS Currency
Despite Brazil's President Luiz Inacio Lula da Silva proposing a common currency for BRICS, India’s External Affairs Minister S. Jaishankar has already dismissed the idea:
"There is no idea of a BRICS currency. Currencies will remain a national issue for a long time to come, " Jaishankar stated.
Challenges for a BRICS Currency
The idea of a unified BRICS currency faces several hurdles:
Economic Diversity: BRICS nations are at different stages of economic development.
Dominance of the Yuan: China's large economy may lead to a yuan-dominated system, which countries like India oppose.
US Sanctions: Sanctions on countries like Russia have prompted some BRICS members to trade in non-dollar currencies, but adopting a common currency remains unlikely.
Dollar's Global Role
Despite a gradual decline in its share of global reserves, the dollar remains the dominant global currency, holding about 60% of central bank reserves as of June, according to the IMF.
Trump’s latest stance reflects concerns over the dollar's future, as he criticized the Biden administration for allegedly ignoring threats to its dominance. This move serves as both a loyalty test for BRICS members and a preemptive challenge to China.
With BRICS expanding to include nations like Iran, Egypt, and UAE, the group's ability to develop a unified currency remains limited.