The world may be on the brink of a new tariff war as U.S. President-elect Donald Trump threatens to impose a 100% tariff on BRICS nations, including India, if they attempt to undermine the U.S. dollar or replace it with another currency for global trade. Trump’s sharp warning follows an October BRICS summit in Kazan, Russia, where the bloc discussed reducing dependency on the dollar and strengthening local currency transactions.
In a strongly worded online post this morning, Trump declared his intention to protect the dollar’s dominance in international markets. “The idea that the BRICS countries are trying to move away from the Dollar while we stand by and watch is OVER,” he wrote. “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% tariffs and should expect to say goodbye to selling into the wonderful U.S. economy.”
The BRICS grouping, which now includes Egypt, Iran, and the UAE alongside Brazil, Russia, India, China, and South Africa, has been exploring ways to reduce reliance on the dollar. In their October summit, leaders signed a declaration aimed at strengthening correspondent banking networks and enabling settlements in local currencies under the BRICS Cross-Border Payments Initiative.
Despite these discussions, Russian President Vladimir Putin noted that no viable alternative to the Belgium-based SWIFT financial messaging system has been developed. India, too, has distanced itself from calls for de-dollarization, with Foreign Minister S. Jaishankar stating in October that such measures are neither part of India’s economic nor strategic policies. “In cases where trade partners do not accept dollars or issues arise due to trade policies, workarounds are explored,” Jaishankar added.
Trump, however, remains unconvinced and firm on his stance. “They can go find another ‘sucker!’ There is no chance that the BRICS will replace the U.S. Dollar in international trade, and any country that tries should wave goodbye to America,” he warned.
India’s History with Trump’s Tariff Policies
India, alongside Brazil and China, has faced Trump’s ire over tariff regimes in the past. During his presidency, Trump frequently criticized India’s trade practices and implemented measures aimed at what he called “reciprocity against protectionist regimes.”
Trump’s proposed 2025 tariff policy prioritizes reciprocity, which he views as a cornerstone of his plan to bolster the U.S. economy. “This is the most important element in making America extraordinarily wealthy,” Trump stated last month during his campaign.
The prospect of heightened tariffs could have significant ramifications for Asian economies, including India, which relies heavily on exports to the U.S. Experts warn that Trump’s policies could strain economic ties and disrupt global trade dynamics, particularly as BRICS nations push for non-dollar transactions.
The stage is now set for a potential showdown between the U.S. and BRICS nations, with Trump signaling that his administration will act decisively to protect the dollar’s supremacy.