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Washington Donald Trump, the president-elect, warned the BRIC emerging-market countries on Saturday, saying he would slap 100% tariffs if they attempted to weaken the US dollar.
Trump’s remark on his Truth Social platform seems to be a reaction to attempts to undermine or displace the US dollar as the main reserve currency of the world.
South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates are the five new members of the BRIC alliance, which was first formed by Brazil, Russia, India, and China.
On Saturday, the president tweeted, “The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER.”
“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,” Trump stated. “They can start looking for another’sucker!'” The United States dollar will never be replaced by the BRICS in international trade, and any nation that attempts to do so should bid America farewell.
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Russian President Vladimir Putin called the U.S. a “big mistake” and accused it of “weaponizing” the dollar during a BRIC conference in October, according to the Associated Press.
The nine BRIC nations together make up 45% of the world’s population. Malaysia, Azerbaijan, and Turkey have also submitted applications to join.
All imported items are subject to tariffs, which are effectively taxes or fees. The extra expenses are usually passed on to customers since importers, not the nations of origin, pay the levies. Anxiety has been raised by Trump’s frequent threats to impose high, universal tariffs, which have affected not only American consumers but also some of the United States’ largest trading partners.
Does the economy benefit or suffer from tariffs?
In an attempt to stimulate the American economy, Trump has resorted to tariffs, claiming that they will bring in trillions of dollars for the government. He has suggested imposing a 10% to 20% duty on all $3 trillion worth of imports annually, with a 60% rate applied to Chinese goods.
According to some analysts, these taxes are expected to slow GDP and raise inflation in the US. In September, Goldman Sachs, one of the biggest investment firms in the country, issued a warning that Trump’s plan might increase inflation by as much as 1.2% in 2025.
In 2018, Trump levied taxes on imports totaling $380 billion. Despite his assertion that the tax is paid by foreign nations, a National Bureau of Economic Research study concluded that “the full incidence of the tariff falls on domestic consumers.” According to a New York Fed analysis, the average household lost $831 annually as a result of Trump’s initial tariffs.
Trump also suggested last Monday that if Washington doesn’t cooperate with the United States in combating the fentanyl drug overdose problem and illegal immigration into the country, he will impose tariffs on three of Washington’s largest trading partners. He promised to impose a 10% tariff on China and a 25% tariff on Canada and Mexico.
More: Economists predict that Donald Trump would raise inflation through tax cuts, tariffs, and deportations.
On Wednesday, Trump discussed such tariffs with Mexican President Claudia Sheinbaum. Additionally, on Friday night, Canadian Prime Minister Justin Trudeau took a plane to Mar-a-Lago to engage with Trump about the tariff threats.
