There is no denying that US President Donald Trump’s Liberation Day tariffs are set to shake up the global order. With it previously targeting the BRICS bloc, the alliance may get a boost as Deutsche Bank has warned of a potential “dollar confidence crisis.”
Wednesday saw Trump announce a new baseline tariff of 10% for all of the country’s trading partners. Subsequently, the greenback has struggled, with geopolitical tensions and the United States’ own economic situation fueling concern about the currency’s stability. The situation could only strengthen nations in the BRICS bloc that have spent the last several years de-dollarizing.
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BRICS Nations May Get Boost as Trump Tariffs Could Hinder the Greenback
The BRICS economic alliance’s ongoing de-dollarization efforts are certainly no secret. In fact, those pursuits were a primary reason why the economic alliance was in the crosshairs of the returning Trump administration. However, recent action by the president could only fuel the economic standing of the bloc.
Trump announced a new Liberation Day tariff plan that targets almost all trading partners. He announced the move as an effort to balance trade and has led the US stock market to plummet a day later. Moreover, the move could benefit BRICS, as Deutsche Bank risks there may be a ‘dollar confidence crisis.”
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“The safe haven properties of the dollar are being eroded, and this is imposing a significant cost on unhedged dollar holdings,” George Saravelos, the bank’s head of FX research, said, according to The Guardian. “Beyond that, developments since the start of the year make us worried about a broader undermining of confidence in the US economic outlook and the medium-term desirability of dollar allocations,” he added.
Additionally, Saravelso noted the “process of US disinvestment is accelerating.” The plan has led many to observe a concerning reality for the United States, with an increasing account deficit and a greenback overly reliant on capital inflows. If things continue, de-dollarized nations may be in the best position globally.
There is no bigger contingent in this respect than BRICS. Throughout 2024, the bloc heavily invested in gold, and that appears to be paying off. The metal has surged through the first three months of 2025, reaching continuous all-time highs. Additionally, that should only continue amid increased geopolitical concern.