On Sunday, the U.S. President-elect Donald J. Trump took to his social media platform, Truth Social, and threatened the BRICS grouping, which includes India as a key member, with “100 percent tariffs” in the instance of adopting a joint new currency or supporting alternative options rivaling the U.S. dollar.
Intended to address any challenges to the dollar’s dominance in global trade, Trump wrote in a social media post early Dec.1:
“The idea that the BRICS countries are trying to move away from the dollar while we stand by and watch is OVER.”
BRICS, which is an acronym for five major emerging economies—Brazil, Russia, India, China, South Africa, represents a significant bloc in international relations, economics, and global development. Together, BRICS nations account for about 40% of the global population and over 25% of the world’s GDP. This year, nations like Iran, Egypt, Ethiopia, and the United Arab Emirates have also become a part of BRICS, now representing half of the world’s population.
“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 per cent tariffs and should expect to say goodbye to selling into the wonderful U.S. economy. They can go find another ‘sucker!’ 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,” Trump said in his post.
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In October, the 16th BRICS summit was held at Kazan, Russia where the importance of economic collaboration among member nations was highlighted to reduce reliance on western nations. At the time, Russian President Vladimir Putin addressed the issue, warning that the “dollar is being used as a weapon.”
However, Indian Prime Minister Narendra Modi cautioned that BRICS shouldn’t appear as a group that’s trying to replace global institutions.
“Finding payment mechanisms that skirt—but do not directly contravene—sanctions is aligned with member states’ interests. But a common currency, which would undoubtedly be China-led, would not appeal to other members—especially India,” Richard Rossow, a senior adviser and an expert in US-India relations told The American Bazaar.
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Rossow, who holds the Chair on India and Emerging Asia Economics at the Center for Strategic and International Studies (CSIS), also said: “The ability to control currency is a critical policy tool in areas like inflation control, and it is hard to imagine BRICS members ceding such authority.”
On Tuesday, Indian finance minister Pankaj Chaudhary avoided taking a definitive stance on the potential joint currency for BRICS nations issue raised in the Parliament session, saying that a report titled “BRICS Chairmanship Research on the Improvement of the International Monetary and Financial System” had been “taken note of” by the finance ministry.
Today, Kremlin spokesperson Dimitry Peskov has also weighed in on Trump’s online remarks about BRICS over the weekend, saying: “The dollar is starting to lose its attractiveness as a reserve currency for many nations,” adding that its fading dominance is a “process gaining strength.”
Russia has pushed for the BRICS Bridge platform, a proposed international payments system as an alternative to the dollar-based trading system. Foreign Minister Sergey Lavrov has emphasized that such initiatives aim to shield countries from the economic influence of the U.S. and EU.
However, Rossow points out that “practically speaking, BRICS mostly exists in statements.”
“The practical impact of BRICS is fairly negligible, beyond some joint lending programs under the New Development Bank,” Rossow noted.
“For President Trump, complaining about BRICS is a nice sound-bite but will not have a real-world impact,” he added. Trump’s second term is set to begin on Jan. 25, 2025 as he returns to the White House as the 47th U.S. president. Whether the push for “de-dollarization” will persist or fade before his presidency unfolds remains to be seen.