President Trump has claimed that the BRICS alliance was established to undermine the US dollar’s dominance as the world’s reserve currency.
The BRICS is an alliance consisting of Brazil, Russia, India, China, South Africa, and others.
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He has warned that BRICS nations face a
10% tariff on their goods entering the US, asserting that their actions aim to “degenerate” the dollar and challenge its global standard.
Trump has emphasized that losing the dollar’s status would be catastrophic, likening it to “losing a major world war,” and vowed to maintain its dominance.
Currently, the US dollar remains the world’s primary reserve currency, used in roughly 58% of global foreign exchange reserves and 88% of currency exchanges, bolstered by the US’s economic strength and geopolitical influence.
Experts argue that creating a viable BRICS currency is challenging due to the bloc’s diverse economic systems.
There are other factors such as political differences, and the dollar’s entrenched role in global trade, particularly for commodities like oil.
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Trump’s tariff threats, including a 100% tariff if BRICS pursues a rival currency, reflect concerns about maintaining US economic leverage.
These statements align with his broader “America First” trade policies, which include tariffs on other nations like Mexico and Canada to address issues like immigration and drugs.
However, critics argue that such tariffs could strain relations with key trading partners like India and China, potentially spurring retaliatory measures and increasing global economic instability.