The 16th BRICS summit took place in the Kazan region of Russia this week with the participation of 40 countries in the event. The summit saw major changes with new policies, announcements, and trade deals taking place. The mock-up of a BRICS currency was gifted to Russian President Vladimir Putin indicating that the alliance is aiming to challenge the US dollar. If the new BRICS currency becomes a reality, several major sectors in the US will be severely affected.
Also Read: Goldman Sachs Predicts the Future of BRICS Currency
The bloc wants to use the new common currency or local currencies for trade and completely ditch the US dollar. In this article, we will highlight the top 3 major US sectors that will be severely affected if BRICS ditches the dollar for trade.
Also Read: The Gloves Are Off: BRICS Is Officially Challenging the US Dollar
Launch of BRICS Currency Could Majorly Affect 3 US Sectors
A total of 3 US sectors could be seriously affected if BRICS stops using the dollar for trade and transactions. The sectors include the entire financial system dominated by the West, investment banks, trade, and daily essentials across America. The major US financial sectors that could be impacted by the formation of a new BRICS currency are:
- Banking and finance
- International Trade and Investment
- Consumer goods and retail
Also Read: Western Leaders React to BRICS 2024 Summit
The banking and finance systems are dominated by the US and the East plays under the rules of the West. If the BRICS currency gains strength, the US will lose control of the global hegemony that the dollar enjoys. This would make the banking system in America unstable as the USD will find no takers overseas.
The second sector to be hit will be the international trade and investments. BRICS could rewrite trade to suit their agenda and use the new currency for cross-border transactions. Therefore, investments in the US dollar will dry up leading to a deficit of the currency. The USD runs on a supply and demand mechanism, and if the demand fails, the situation will lead to hyperinflation.
Also Read: BRICS De-Dollarization Begins: 40 Countries Attend 2024 Summit
Here, we come to the third point which is consumer goods and retail. If the economy enters the hyperinflation phase, the cost of day-to-day essentials will automatically skyrocket. The development will lead to job cuts and make life unaffordable for the average American. The greenback is currently in the crosshairs of a major financial shift that could be dominated by the East. Therefore, the BRICS currency is a risk to these three US sectors and the dollar.