On January 30 (Reuters) report, President Donald Trump cautioned BRICS member countries against replacing the U.S. dollar as a reserve currency by reiterating his threat of imposing 100% tariffs, which he originally made shortly after winning the November presidential elections.
We will demand a commitment from these seemingly adversarial countries that they will not introduce a new BRICS currency or support any alternative to the powerful U.S. Dollar. Failure to comply will result in facing 100% tariffs, Trump stated on Truth Social, mirroring a similar statement he posted on Nov. 30.
Previously, Russia had voiced opposition to any attempt by the U.S. to enforce the use of the dollar among countries.
The BRICS group comprises Brazil, Russia, India, China, and South Africa, as well as several other recent additions. Although the group does not share a unified currency, discussions about the topic have gained traction following Western sanctions on Russia related to the conflict in Ukraine.
There is no likelihood of BRICS supplanting the U.S. Dollar in global trade or elsewhere, and any nation attempting to do so should prepare for tariffs and distance themselves from America, Trump added.
Trump's notice to BRICS coincides with Canada and Mexico awaiting his decision regarding the promised imposition of 25% tariffs on the United States' North American trading partner effective February 1.
He aims to leverage tariffs to compel Mexico and Canada to assist in curbing the influx of illegal drugs, notably the lethal opioid fentanyl, and unauthorized migrants entering the U.S.
Recent factors such as the robust U.S. economy, stringent monetary policy, and increased geopolitical tensions have reinforced the dominance of the U.S. dollar in the global economy. This backdrop has fueled efforts by BRICS nations to shift away from the dollar towards other currencies despite the U.S.'s consistent role as the primary reserve currency globally.
A study conducted by the Atlantic Council's GeoEconomics Center last year validated that the U.S. dollar continues to hold its position as the world's predominant reserve currency, with neither the euro nor the collective BRICS nations successfully diminishing global dependence on the dollar.
The term BRICS, initially comprising Brazil, Russia, India, and China, was coined in 2001 by Jim O'Neill, then the chief economist at Goldman Sachs. The group was informally established in 2009 to offer members a platform to challenge the global authority of the United States and its Western allies. South Africa joined in 2010, expanding the group to include South Africa, and later welcomed Egypt, Ethiopia, Iran, and the United Arab Emirates in 2023, with their recent membership confirmed earlier this month.