President-elect Donald Trump has warned he will impose 100% tariffs on BRICS countries if they attempt to replace the US dollar with a new currency.
Trump stated on social media, “The idea that BRICS countries are trying to move away from the Dollar is OVER.” BRICS includes China, Russia, Brazil, India, South Africa, Iran, Egypt, Ethiopia, and the UAE.
During his campaign, Trump emphasized the need for tariffs. Recently, he has escalated these threats, particularly towards emerging economies in the BRICS bloc.
Trump’s Warning to BRICS Countries
Leaders in Brazil and Russia have discussed creating a BRICS currency to reduce reliance on the US dollar in global trade. However, internal disagreements have delayed any progress.
Trump posted on Truth Social, “These countries must commit to not creating a new BRICS currency or backing any alternative to the US dollar. If not, they will face 100% tariffs.” He added, “They can go find another sucker.”
Tariff Threats as Negotiation Tactics
Some Trump allies suggest that his tariff threats are part of a negotiation strategy. Republican Senator Ted Cruz pointed out that such threats have produced results before.
Trump’s Treasury Secretary nominee, Scott Bessent, also indicated that Trump’s approach is to escalate before de-escalating, using tariffs as leverage.
Understanding Tariffs
A tariff is a tax on imports, based on the value of the goods. For example, a 25% tariff on a $50,000 car would add a $12,500 charge.
Trump views tariffs as a tool to boost the US economy, protect jobs, and generate tax revenue. However, economists note that these costs are usually paid by domestic companies importing goods, not foreign exporters.
Trump imposed many tariffs during his first term, and most remain in place under President Biden. Studies suggest US consumers have largely absorbed the cost of these tariffs.