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Tariff Threat: Will Trump’s 100% Gambit Derail BRICS’ De-Dollarization Dreams?

As Trump sharpens his tariff blade, BRICS faces the ultimate test of resilience—will the quest for de-dollarization crumble under pressure?

Thus, in a dramatic turn of events immediately after his swearing-in as the 47th President of the United States, Donald Trump reiterated his tariff threats to impose 100% on BRICS countries, including India, in case they do not stop their de-dollarization process. During the press conference held at the Oval Office, he made this bold statement, bringing greater attention to what is now the economic and geopolitical fallout of the ongoing currency debate.

BRICS: An Overview of the Alliance

BRICS is the acronym that stands for Brazil, Russia, India, China, and South Africa. It was formed in 2009 as a bloc to promote economic cooperation and trade relations among emerging economies for sustainable development. Recently, the bloc has added more members, such as Iran, Egypt, Ethiopia, and the United Arab Emirates. The United States is not part of this influential group, representing a significant portion of the global population and GDP.

It has been working on the de-dollarization process, or reduction of dependence on the US dollar in international trade. Russia and China have taken the lead in developing alternative mechanisms for global transactions that could evolve into a currency specific to the BRICS countries.

Next Brics Summit 2025
BRICS- Brazil, Russia, India, China, and South Africa.

The Context Behind Trump’s Threat

President Trump responded to the growing BRICS momentum to challenge the hegemony of the US dollar by saying that if BRICS wants to de-dollarize, they’ll be slapped with a 100% tariff on business with the United States. It’s not even a threat; It is a promise, not even a threat. Mr. Trump set the dollar as the bedrock of international trade and promised to protect American economic interests. This notice reflects the administration’s stance on “America First” in terms of trade policy. Targeting BRICS enables the administration to counter efforts to undermine the dollar’s supremacy in international markets.

The Drive for De-Dollarization

De-dollarization is something that the members of BRICS have adopted, considering various factors:

  1. Economic Independence: For instance, Russia and China are looking for ways to diminish their dependency on the US dollar to limit sanctions and financial strains.
  2. Geopolitical Tensions: The increasing rivalry between the US and BRICS nations has made the latter opt for alternative routes not to be overly  dependent on the dollar in trade.
  3. Enhanced Cooperation: De-dollarization aligns with BRICS’ vision of fostering stronger intra-bloc ties and promoting the use of national currencies in trade.

Russian President Vladimir Putin called during the 2023 BRICS Summit for the bloc’s members to enhance the cooperation of their national banks and establish new settlements in national currencies. China also supports this idea, considering it a global de-dollarization initiative.

India’s Position on De-Dollarization

Unlike Russia and China, India has been cautious about de-dollarization, according to RBI Governor Shaktikanta Das. In December 2024, RBI clarified that India only focuses on “de-risking” domestic trade rather than proactively pursuing de-dollarization. According to him, India focuses on protecting its economy from geopolitical storms without a head-on challenge to the dollar’s supremacy. India’s hesitance can be attributed to several factors:

De-dollarization: What Happens if the Dollar Loses Reserve Status?
De-dollarization aligns with BRICS’ vision of fostering stronger intra-bloc ties and promoting the use of national currencies in trade.
  1. Trade Dependencies: A considerable amount of India’s international trade is in dollars, so this step cannot be taken suddenly.
  2. Strategic Alliances: India is very cooperative with the United States. This extreme measure regarding de-dollarization may try to bend the bilateral ties.
  3. Economic Stability: As the dollar holds an excellent reputation for reliability and is acknowledged worldwide, it has become everyone’s priority for international-level transactions.

Potential Impacts of 100% Tariffs

Trump’s tariff threat, if implemented, could have far-reaching consequences for BRICS nations and global trade dynamics. Here’s a closer look at the potential repercussions:

  1. Economic Strain on BRICS Nations: The 100% tariff will considerably raise the costs of exports to the US, which could collapse the key industries and volumes.
  2. Supply Chain Disruptions: Companies relying on trade between the US and BRICS could be impacted in some places with significant interruptions as pricing increases and fewer items may be available.
  3. Geopolitical Fallout: This will naturally deepen the mistrust between the US and BRICS and expand the global economic division.
  4. Impact on Global Markets: Markets could be roiled since the heightened tariffs and barriers to trade would slow the pace of economic activity globally.

Trump’s Broader Trade Policy

Protectionist trade measures have been in support by Trump, and the many justifications for the move are expounded by his BRICS strategy. He renegotiated trade agreements to prevent job loss in the United States, imposed stricter laws on immigration, and introduced tariffs on China during his previous term. He supports the strategic use of economic might.

Trump Trade War
Trump’s tariff threat, if implemented, could have far-reaching consequences for BRICS nations and global trade dynamics.

In attacking BRICS, Trump is fighting for:

  • Protection of the dollar as the global trade currency.
  • Strengthen US manufacturing and exports.
  • Counter the ascending influence of the BRICS economies, especially from China.

Responses from BRICS Nations

Trump’s remarks have elicited varied reactions from BRICS nations:

  • Russia Will probably double down on its efforts to reduce dollar usage as part of its strategy against US sanctions and assert economic self-sufficiency.
  • China should develop alternative trade arrangements, including the digital yuan.
  • India may follow a balanced approach to protect trade interests without directly opposing US plans.
  • Brazil and South Africa: May weigh the pros and cons of aligning with the de-dollarisation agenda against sustaining friendly trade relationships with the US.

The Path Forward

The aggressive posturing by the United States underscores what BRICS may face in going through the de-dollarization route. To be sure, the bloc is making good mileage, but making a complete de-dollarization move will necessitate

  1. Robust Financial Infrastructure: Developing appropriate payment systems, banking networks, and practical alternative currencies support.
  2. Enhanced Intra-BRICS Trade: Building their economic interests to reduce extraneous market sources.
  3. Diplomatic Outreach: Engagement with Non-BRICS Countries fostering general support for a de-dollarization agenda.

Conclusion

One of the significant issues in the de-dollarization talk is undoubtedly Donald Trump’s 100% threat against the BRICS nations. The US wants to maintain economic supremacy, whereas the BRICS want freedom and flexibility to trade internationally. This is a natural propensity only because India is careful about it.

Trump steel tariffs
may follow a balanced approach to protect trade interests without directly opposing US plans.

As the world observes, the ending of this developing story will likely shape the future of global trade and economic policy. The contest for BRICS lies between the pull of a dollar-based worldwide economy and the hope for independence. It will demand that the US adapt to a multipolar world where rising economies have more clout.

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