President Donald Trump has threatened BRICS countries with 100% tariffs if they continue to end reliance on the dollar. Trump stressed that goods entering the US will face a 100% tariff and the bill will be footed by BRICS. This comes after he announced the establishment of the External Revenue Service (ERS) which will collect tariffs and taxes from foreign countries.
Also Read: Trump Directs Agencies for Emergency Steps To Reduce Cost of Living
BRICS now needs to rethink their de-dollarization initiatives as Trump is coming at them harder. Imposing tariffs on goods entering the US will create a financial imbalance in the imports and exports sector. Businesses could take losses and find it hard to sustain in a competitive global market.
“As a BRICS nation, they’ll have a 100% tariff if they so much as even think about doing what they thought (de-dollarization), and therefore they’ll give it up immediately,” said Trump to ANI.
Also Read: BRICS Realize They Cannot Challenge the US Dollar
Trump Challenges BRICS on De-Dollarization
Trump is not taking the BRICS idea of de-dollarization lightly and is stepping up with the threats. The alliance could most likely cool down on ending dependency on the US dollar under his term. Emerging economies tried to outdo the US dollar by trading in local currencies for cross-border transactions.
Also Read: BRICS: 2 Countries Ready to Ditch SWIFT and Launch New Payment System
However, things might soon take a U-turn as a 100% tariff on goods could cause serious damage to their economies. Also, Trump has vowed to protect the US dollar from BRICS and bring the de-dollarization agenda to a halt. The next four years could experience intense trade wars where both the US and developing countries will try to push their agenda.
Nonetheless, without the support of the US dollar, BRICS might find it tougher to operate and sustain in the global markets. Trump could leverage the opportunity and put an end to the de-dollarization initiative. His tenure could redo several policies and bring developing countries in line.