President-elect Donald Trump on Saturday threatened to impose 100 percent tariffs on a group of nine countries if they move to undermine the US dollar.
His threat was directed at the countries of the so-called BRIC coalition, which consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates.
Türkiye, Azerbaijan and Malaysia have applied to become members, and several other countries have expressed their interest in joining.
While the US dollar is the most widely used currency in global business and has weathered past challenges to its supremacy, alliance members and other developing countries say they are tired of America’s dominance of the global financial system.
The dollar represents approximately 58 percent of the world’s foreign exchange reserves, according to the International Monetary Fund, and major commodities such as oil are still bought and sold primarily using dollars. However, the dollar’s dominance is threatened with the BRICS’ growing share of GDP and the alliance’s intention to trade in non-dollar currencies – a process known as de-dollarization.
“We are asking for a commitment from these countries that they will not create a new BRICS currency, nor will they support any other currency to replace the strong US dollar, or they will face 100% tariffs, and they must do so,” Trump said in a post on Truth Social. . We expect to say goodbye to selling in the wonderful American economy.
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At the BRICS summit in October, Russian President Vladimir Putin accused the United States of using the dollar as a weapon, calling it a “big mistake.”
“It is not us who reject the use of the dollar,” Putin said at the time. “But if they do not allow us to 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 provide an alternative to the global banking messaging network, SWIFT, and allow Moscow to evade Western sanctions and trade with partners.
Trump said that there is “no chance” that the BRIC group will replace the US dollar in global trade, and that any country that tries to achieve this “must wave goodbye to America.”
Research shows that the role of the US dollar as the main global reserve currency is not threatened in the near future.
The Atlantic Council’s model assessing the dollar’s status as the world’s main reserve currency suggests that the dollar is “safe in the near and medium term” and continues to dominate other currencies.
Trump’s latest threat regarding tariffs comes after he threatened to impose a 25% tariff on everything imported from Mexico and Canada, and an additional 10% tax on goods coming from China, as a way to force countries to do more to stop the flow of illegal immigration and impose tariffs. Customs duty. Drugs to the United States
He has since made a phone call with Mexican President Claudia Sheinbaum, who said on Thursday that she was confident that a tariff war with the United States could be avoided. Canadian Prime Minister Justin Trudeau returned to his country on Saturday after meeting with Trump, without guarantees that the president-elect would back down from threatening to impose tariffs on Canada.
& Edition 2024 The Canadian Press
