President-elect Donald Trump has issued a stern warning to the BRICS nations— Brazil, Russia, India, China, and South Africa — against creating their own currency, threatening a 100 per cent tariff if they move away from the U.S. dollar. Established in 2009, BRICS nations recently welcomed Egypt, Ethiopia, Iran, and the United Arab Emirates at the 16th BRICS Summit held from October 22-24 in Kazan, Russia.
In a statement on November 30, 2024, the President-elect, conveyed, “The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER,” adding, “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.”
Trump further stated that there is no possibility of BRICS replacing the U.S. dollar in international trade, and any country attempting to do so should expect to sever ties with America.
India’s Foreign Minister, S. Jaishankar, during a press conference on July 3, 2023, emphasized India’s commitment to strengthening its own currency, the rupee. Addressing speculation about a potential BRICS currency, he stated, “On what we will discuss at the BRICS meeting, we’ll have to see… but there is no idea of a BRICS currency… currencies to my mind will remain very much a national issue for a long time to come.”
On October 18th, in response to a proposal for an alternative international payment platform, Russian President Vladimir Putin, speaking to international journalists at Novo-Ogaryovo ahead of the BRICS summit in Kazan, clarified that Russia did not voluntarily abandon the U.S. dollar but was instead denied access to it. Currently, 95 per cent of Russia’s foreign trade is conducted using national currencies.
“You see, they did it themselves. So be it. They thought everything would collapse. No, it did not. Trade is developing on a new foundation…” noted President Putin. “We would like to propose some really serious things to our colleagues – I will not go into details at this point.”
The Russian President also highlighted the challenges associated with using digital currencies in investment processes. He emphasized that this issue is not limited to BRICS nations but also extends to how these countries utilize digital currencies to support other developing economies with strong growth potential.
Putin further highlighted that BRICS represents 45 percent of the world’s population, and spans 33 percent of the Earth’s land area, while also steadily growing its influence in global trade and commerce. Recently, around 30 countries have expressed interest in collaborating with BRICS or joining its activities.
Brazilian President Luiz Inácio Lula da Silva, a founding member of the bloc, also proposed the creation of a common currency for the region during a meeting with South American heads of state on May 30, 2023, in Brasilia.
In a separate development, Trump also issued a statement announcing that on January 20th, following his inauguration, one of his first executive orders would impose a 25 percent tariff on all products coming from Mexico and Canada. He cited both countries’ “ridiculous open borders,” as the impetus.
“Thousands of people are pouring through Mexico and Canada, bringing Crime and Drugs at levels never seen before. Right now, a Caravan coming from Mexico, composed of thousands of people, seems to be unstoppable in its quest to come through our currently Open Border,” the statement added.
Trump reiterated that tariffs would remain in place until the flow of drugs, particularly Fentanyl, and the flow of “Illegal Aliens,” into the United States is effectively stopped. Trump stressed that both Mexico and Canada have the authority and capacity to address this persistent issue and warned that failure to act would result in significant financial consequences for them.
Following this threat, Canadian Prime Minister Justin Trudeau met with the President-elect on November 29th at Trump’s Mar-a-Lago estate in Florida.
After the meeting, Trump issued a statement describing their meeting as “productive,” noting that he and Trudeau had addressed several important issues. These included the fentanyl and drug crisis, fair trade agreements, and the significant trade deficit the U.S. faces with Canada.
“I made it very clear that the United States will no longer sit idly by as our Citizens become victims to the scourge of this Drug Epidemic, caused mainly by the Drug Cartels, and Fentanyl pouring in from China,” he said noting, “Prime Minister Trudeau has made a commitment to work with us to end this terrible devastation of U.S. Families. We also spoke about many other important topics like Energy, Trade, and the Arctic. All are vital issues that I will be addressing on my first days back in Office, and before.”
