Another threatening statement by Trump – Dollar and BRICS

 

By Magyar Békekör (Egyesület Hírek)  

US President Trump has threatened the BRICS community with 100 percent tariffs on its goods if they are not traded in US dollars, the correspondent of the Hungarian Community for Peace reported on Friday.

On his Truth Social website, Trump wrote that if the BRICS countries do not commit to trading in US dollars, they can “say goodbye to their amazing sales to the American economy.”

“The era of BRICS countries trying to move away from the dollar while we just stand and watch is over. They can look for another sucker nation for themselves. There is no chance that the BRICS will replace the US dollar in international trade or anywhere else. Any country that tries will have to face tariffs and say goodbye to America,” he wrote.

On January 22, the new [resident in] the White House threatened Russia with similar sanctions. On the same website, he wrote that if Russia does not immediately conclude a peace agreement with Ukraine, it will impose sanctions on all Russian products, with high taxes and tariffs on all goods that Russia sells in the United States.

In the BRICS, 65 percent of trade is recorded in national currencies. The equalization of value in US dollars and euros fell below thirty percent. They want to further strengthen the national currency mechanism at the expense of the dollar, while at the same time working on the creation of a single currency system. The “Global South,” as emerging countries are called, chooses this path because they cannot kick a ball in the US-controlled International Monetary Fund (IMF), which makes them subordinate to American interests that impede their national development.

Although the ten BRICS countries are indeed striving to create a common currency that would replace the US dollar, they have not yet completely switched off the US currency. The change from dollar settlement to national currency is the most striking in the exchange between China and Russia: around 95 percent. But Brazil, which is particularly interested in trade with the US, also settles accounts with China predominantly in national currency, while with the United States in dollars.

The “dethronement of the dollar” is not an easy process amid the changing balance of power in the world economy in favour of emerging countries, given that the United States still plays a leading role in the world economy, although it has fallen from the top of the world trade rankings to second place behind China. The BRICS currently account for 37 percent of global economic output and its share is growing.

At the BRICS summit in Kazan in October 2024, the alternative to dollar-based settlement and the SWIFT remittance system was one of the most important financial topics.

According to economists with expertise in world economic processes, the BRICS seeks to establish its sovereign development primarily in trade with each other within the framework of an alternative currency system, by creating its own currency separate from the dollar. But he does not see the future new common currency as exclusive, but as one of the financial poles of the multipolar world order, which he envisions as balancing rather than eliminating the dollar-settled Western pole.

Presumably, as part of the future East-West comprehensive reconciliation between the world economy and world politics, the role of the dollar and the BRICS currency in the framework of a comprehensive reform of the IMF or a refunded “IMF” will be clarified.

Originally formed by five countries (Brazil, Russia, India, China and South Africa), the BRICS has ten member countries since 2025: Egypt, Iran, Ethiopia, the United Arab Emirates and Indonesia. Brazil announced the latter’s membership on 6 January 2025.

~ Edited by Magyar Békekör (Hungary)