The BRICS alliance is divided on the idea of replacing the US dollar with local currencies for trade and transactions. Countries such as India, Brazil, South Africa, and the UAE are slowly going soft on the idea of de-dollarization. Trump’s recent tariffs are the cause for backtracking as high tariffs eat into the revenue sheets of their imports and exports sector. The stock market crash is also making things worse as trillions worth of funds are being erased from the markets.
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Not Every Country Wants to End US Dollar Reliance
The proposal to end the US dollar dependency now hangs on a thread as one-third of the BRICS alliance is stepping away from the idea. Only countries such as China, Russia, and Iran are aggressively pursuing the de-dollarization agenda globally. Russia and Iran are reeling under sanctions and are desperate to break free to protect their respective economies.
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On the other hand, China is using BRICS as a stepping stone to further its agenda of global domination. Its counterpart India is aware of China’s advocacy and is placing barriers to the de-dollarization advancements. India believes that China is using BRICS as a pawn to make the Chinese yuan race ahead of the US dollar.
Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade. Looking at how the alliance is divided on USD replacement, the de-dollarization agenda might fall flat during Trump’s era. Tariffs are a big burden for developing countries as they could affect their nation’s growth and overall GDP.
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Failing to get the numbers might lead to less consumerism and eventually snowball into job losses. The stakes are high as developing countries cannot risk their finances as it leads to business deficits. BRICS is on a slippery slope and doing away with the US dollar is now a distant dream under Trump.