Trump threatens 100% tariffs on the BRIC bloc of nations if they act to undermine the US dollar

President-elect Donald Trump on Saturday threatened 100% tariffs on a bloc of nine nations if they act to undermine the US dollar.

His threat was aimed at countries in the so-called BRIC alliance, which consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates.

Turkey, Azerbaijan and Malaysia have applied to become members, and several other countries have expressed interest in joining.

While the US dollar is by far the most widely used currency in global business and has survived past challenges to its prominence, members of the alliance and other developing countries say they are tired of US dominance of the global financial system.

The dollar represents about 58% of the world’s foreign exchange reserves, according to the IMF, and major commodities such as oil are still primarily bought and sold using dollars. However, the dollar’s dominance is under threat with BRICS’ growing share of GDP and the alliance’s intention to trade in non-dollar currencies – a process known as de-dollarization.

Trump said in a Truth Social post: “We demand a commitment from these countries that they will neither create a new BRICS currency nor support any other currency to replace the mighty US dollar, nor face 100 % tariff, and should expect to say goodbye to selling into the wonderful American economy.”

At a BRIC summit in October, Russian President Vladimir Putin accused the US of “weaponizing” the dollar, describing it as a “big mistake”.

“It is not us who refuse to use the dollar,” Putin said at the time. “But if they don’t let us work, what can we do? We are forced to look for alternatives.”

Russia has specifically pushed for the creation of a new payment system that would offer an alternative to the global banking messaging network, SWIFT, and allow Moscow to evade Western sanctions and trade with partners.

Trump said there is “no chance” the BRIC will replace the US dollar in global trade, and any country that tries to make that happen “should wave goodbye to America.”

Research shows that the US dollar’s role as the primary global reserve currency is not threatened in the near future.

An Atlantic Council model assessing the dollar’s place as the primary global reserve currency says the dollar is “safe in the short and medium term” and continues to dominate other currencies.

Trump’s latest tariff threat comes after he threatened to slap 25% tariffs on all imports from Mexico and Canada and an additional 10% tax on goods from China, as a way to force countries to do more to stem the flow of illegal immigration and drugs to the United States

He has since held a conversation with Mexican President Claudia Sheinbaum, who said Thursday she is confident a tariff war with the United States can be averted. Canadian Prime Minister Justin Trudeau returned home Saturday after meeting Trump with no assurances that the president-elect will back down from threatened tariffs on Canada.