US President Donald Trump has threatened to impose 100% tariffs on countries in the BRICS+ grouping if they attempt to replace the US dollar as a global reserve currency. The BRICS+ nations, comprising Brazil, Russia, India, China, and South Africa, have been working on creating a common currency that could rival the US dollar.
The BRICS+ grouping has set up its own financial structure and institutions, aiming to reduce dependence on the US dollar in international trade. However, Trump’s administration is opposed to this development, citing the potential loss of influence over global economic transactions.
The US dollar has been the world’s principal reserve currency since the Second World War, thanks to the country’s position as the largest trading nation and the establishment of global institutions like the International Monetary Fund. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) system also uses the US dollar as a default currency for international transactions.
Sanctions imposed by SWIFT can freeze bank accounts and restrict transactions with other countries, giving the US significant leverage over global economic governance. Trump’s administration sees this as a threat to its power and is pushing back against BRICS+ efforts to create an alternative reserve currency.
The shift towards a multi-polar world, with emerging economies like China, India, and Russia challenging the US-led West, has created tensions between Washington and these nations. The BRICS+ grouping already represents nearly half of the world’s population and over a third of global economic output, making it a significant player in the global economy.
As the BRICS+ nations continue to strengthen their economic ties, Trump’s threats may be seen as an attempt to maintain US influence and control over global economic transactions. The outcome of this standoff remains uncertain, but one thing is clear: the future of the global reserve currency will have significant implications for international trade and economic governance.
Source: https://www.ndtv.com/world-news/donald-trump-feels-the-heat-from-a-rising-brics-threatens-100-tariff-7529128