The President-elect of the United States, Donald Trump, has threatened to impose 100% customs duties against BRICS – a bloc of nine countries with emerging economies - if they continue to threaten the dominance of the US dollar, namely by creating its new currency.
“We demand a commitment from these countries that they will not create a new BRICS currency, support any other currency to replace the mighty US dollar, face 100% tariffs and hopefully ‘say goodbye to sales’ with an economy great USA. ” , Trump wrote late Saturday on the social network Truth Social, which he created.
The threat from Trump, the President-elect of the United States on November 5, was directed at the countries that make up the BRICS alliance, which includes Brazil, Russia, India, China, South Africa, Egypt, the United Arab Emirates, the Currently Ethiopia and Iran. . and it has other candidates for admission, such as Turkey, Azerbaijan or malaysia.
For the North American President-elect, there is “no chance” that the BRICS countries will replace the US dollar in world trade and any nation that tries to do so must “say goodbye to America”.
In October, at a summit of the BRICS nations, Russian President Vladimir Putin accused the United States of using the dollar as a weapon, describing the North american attitude as a “big mistake”.
Russia specifically pushed for the creation of a new payments system that would offer an option to the global banking messaging network, SWIFT, and allow Moscow to avoid Western sanctions and trade with partners.
With the increasing weight of the BRICS economy,the bloc seeks to counter the dominance of the US currency,which accounts for about 58% of global reserves and is used in the transactions of key “commodities”,such as oil.
What potential alternatives to the US dollar are being discussed by BRICS nations for international trade?
Interview: The Future of the US Dollar Amidst BRICS Challenges
An insight with Dr.Emily Hargrove, International Economics Expert
Time.news Editor (TNE): Thank you for joining us today,Dr. hargrove. The recent comments from President-elect Donald Trump about imposing 100% customs duties on BRICS nations raise concerns about the future of the US dollar. Can you provide an overview of the current stance by BRICS countries regarding a new currency?
Dr. Emily Hargrove (EH): Thank you for having me. The BRICS nations—Brazil, Russia, India, China, South Africa, along with Egypt, the UAE, Ethiopia, and iran—are indeed looking to enhance their economic collaboration, which includes discussions around establishing a new currency. They want this to be a counterbalance to the US dollar, which has been the dominant currency globally, accounting for about 58% of global reserves.
TNE: Trump’s threats seem quite intense. What are the implications of imposing such tariffs on these emerging economies?
EH: Imposing 100% tariffs on BRICS countries would likely have notable economic repercussions. It could strain trade relationships and lead to skyrocketing prices for goods entering the US from these nations. The threat could also escalate tensions, pushing BRICS to deepen their cooperation and accelerate plans for a new payment system, which Russia has been advocating to circumvent US sanctions.
TNE: Speaking of sanctions,President Putin mentioned the US uses the dollar as a weapon. How does this reflect the growing tensions in global finance?
EH: That’s a crucial takeaway.The US dollar’s widespread use gives the US considerable leverage in global finance, allowing it to impose sanctions effectively. However, this weaponization of currency can lead to resentment and a push for alternatives. Countries may seek to create a system that reduces their dependence on the dollar to safeguard against potential economic backlash from the US, as evidenced by russia’s call for a new payments system.
TNE: With the ongoing evolution of the global economy, do you beleive there’s a realistic chance that BRICS could replace the US dollar in world trade?
EH: While BRICS certainly has growing economic weight and ambitions, replacing the US dollar entirely is a complex endeavor.The US dollar’s role as a reserve currency is deeply entrenched in global finance. Factors such as stability, liquidity, and trust are crucial for any currency intended to replace it. Certainly, alternative arrangements might emerge, but fully supplanting the dollar in the near term seems improbable.
TNE: For businesses engaged in international trade, especially with BRICS nations, what practical advice can you give?
EH: Businesses should stay informed about these developments and consider diversifying their currency exposure. Evaluate potential risks associated with relying solely on one currency and look into alternative payment systems that may arise as BRICS ventures forward. Additionally, companies should monitor tariff changes and adjust their supply chains as needed to mitigate any sudden changes in trade costs.
TNE: As a closing thought, how do you foresee the relationship between the US and BRICS nations evolving over the next few years?
EH: The relationship will likely become more contentious, with each side asserting its interests more robustly. The US will want to maintain its dollar dominance,while BRICS nations will work towards greater economic independence. This tug-of-war will shape global economics for years to come,and it will be essential for both sides to engage diplomatically to avoid misunderstandings that could lead to economic instability.
TNE: Thank you, Dr. Hargrove, for your insights into this critical topic. Your expertise helps us understand the complexities surrounding the future of the US dollar and emerging economies like BRICS.
EH: It was a pleasure to share my thoughts. Thank you!