US President Donald Trump has threatened to impose a 100% tariff on the BRICS nations if they abandon the US dollar as a global reserve currency and instead support an alternative. In a post on his online platform, Truth Social, Trump stated that the BRICS nations would be required to pledge not to create a new BRICS currency or support another currency to replace the US dollar, or face a 100% tariff. He added that if the nations chose to do so, they could find another country to do business with.
The US dollar has long been the dominant global reserve currency, but some countries, including Russia, have criticized its dominance and sought to develop alternative payment systems. Russian President Vladimir Putin has repeatedly expressed his desire to create an independent payment and settlement system within the BRICS framework.
The introduction of an alternative, non-Western currency could potentially enable countries like Russia, Iran and China to circumvent Western sanctions more effectively. Following the Ukraine conflict, many Western countries imposed sanctions on Russia, which have particularly targeted the country’s financial sector.
The BRICS acronym represents the initial letters of the first five member states: Brazil, Russia, India, China and South Africa. In January 2024, Iran, Egypt, Ethiopia and the United Arab Emirates joined the group. Russian President Vladimir Putin has repeatedly criticized the dominance of the US dollar and has pledged to develop an independent payment and settlement system within the BRICS framework.