Trump threatens ‘100% tariffs’ if Brics nations don’t ‘commit’ to dollar

They ‘should expect to say goodbye to selling into the wonderful US economy,’ the returning US leader said on Saturday.

US President-elect Donald Trump warned the so-called Brics nations that he would require commitments that they would not move to create a new currency as an alternative to using the US dollar and repeated threats to levy a 100% tariff.

“The idea that the Brics countries are trying to move away from the dollar while we stand by and watch is over,” Trump said in a post to his Truth Social network on Saturday.

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Read: Brics+ countries are determined to trade in their own currencies

“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 US Dollar or, they will face 100% tariffs, and should expect to say goodbye to selling into the wonderful US Economy,” he added.

Trump on his campaign trail pledged that he would make it costly for countries to move away from the US dollar.

And he’s threatened to use tariffs to ensure they complied. Saturday’s threat took on new relevance as the president-elect prepares to retake power in January.

Trump and his economic advisers have been discussing ways to punish allies and adversaries alike who seek to engage in bilateral trade in currencies other than the dollar. Those measures include considering options such as export controls, currency manipulation charges and levies on trade, according to people familiar with the matter.

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Trump has long stressed that he wants the US dollar to remain the world’s reserve currency, saying in a March interview with CNBC that he “would not allow countries to go off the dollar” because it would be “a hit to our country.”

The Brics nations — as Brazil, Russia, India, China and South Africa are collectively known — discussed the issue of de-dollarization at a Johannesburg summit in 2023.

Backlash against the dollar’s dominance gained traction in 2022 when the US led efforts to impose economic sanctions on Russia. ADVERTISEMENT: CONTINUE READING BELOW

Economic advisers to Trump and his campaign have spoken in particular about targeting the Brics effort.

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“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 on Saturday.

The president-elect has already rattled world markets ahead of his second term with threats to levy an additional 10% tariffs on goods from China and 25% tariffs on all products from Mexico and Canada if those countries do not do more to stem the flow of illegal drugs and undocumented migrants across US borders.

Canadian Prime Minister Justin Trudeau met with Trump on Friday to discuss trade and border issues in a bid to tamp down tensions between the two allied nations after the tariff threat.

© 2024 Bloomberg

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