Fears of a global trade war have risen after United States President-elect Donald Trump threatened to impose tariffs of 100% on BRICS countries unless their governments agree not to create a new currency that rivals the U.S. dollar.
Posting on his social network Truth Social, Trump announced plans to hike the tariffs if the BRICS countries created an alternative dollar.
“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,” he said.
“There is no chance that the BRICS will replace the U.S. Dollar in International Trade, and any Country that tries should wave goodbye to America.”
The group seeking to de-dollarise the world economy is primarily comprised of Brazil, Russia, India, China and South Africa (BRICS) and has recently expanded to Iran, Saudi Arabia, United Arab Emirates, Egypt and Ethiopia.
At their BRICS summit in South Africa last year, the nations were pushing to conduct more trade between their countries, rather than in dollars.
In October this year, Russian President Vladimir Putin also called for an alternative international payment system that could prevent the U.S from using the dollar as a political weapon.
Other nations however feared the consequences of severing their ties to the U.S and other western countries by breaking away from the dollar.
If Trump’s proposed 100% tariffs at the U.S border are implemented, they would drive up the cost of goods from BRICS members sharply, fuelling U.S inflation and destabilising global trade flows.
This warning from Trump comes less than a week after he declared he would impose increased tariffs on Canada, Mexico and China once inaugurated.
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