President-elect Donald Trump continues to threaten to use tariffs against foreign nations, this time toward a bloc of nine countries if they try to undermine the dollar’s global dominance.
In a post Saturday afternoon on Truth Social, Trump called out the so-called BRIC alliance, which consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates. He threatened to impose 100% tariffs and block their goods from entering the U.S. economy.
“The idea that the BRICS countries are trying to move away from the Dollar while we stand by and watch is over,” Trump said.
“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.”
More:Trump vows 25% tariff on imports from Mexico, Canada: What are tariffs?
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What is the BRIC alliance?
BRICS stands for Brazil, Russia, India, China and South Africa, who are the original members of the intergovernmental organization that first aimed to highlight international investment strategies.
In 2012, for example, the group invested $75 billion toward the International Monetary Fund to boost its lending power.
But in recent years, BRIC has expanded to include other nations. Roughly three-dozen other foreign countries, such as Turkey, Azerbaijan and Malaysia, have applied to join the bloc as it looks to reduce dependence on the U.S. dollar.
America’s currency took over post-World War II
The U.S. dollar remains the world’s most-used currency in terms of global business after overtaking the British pound at the end of World War II.
International leaders assembled at the Bretton Woods International Monetary Conference in 1944 to develop a system for trade and finance in the war’s aftermath. It was decided a common currency was needed, but at the time Britain’s economy was devastated by Nazi Germany’s ground war.
Experts tossed around different ideas, such as creating a new inter-country currency for global business, but ultimately the U.S. dollar was more muscular.
According to the IMF, the dollar represents roughly 58% of the world’s foreign exchange reserves, and it has survived past challenges. That means the U.S. dollar is often the center of business transactions even when goods or services are being bought between or within foreign countries.
Dollar’s global dominance being challenged
Still, BRIC alliance leaders assert they and developing nations are tired of America’s dominance.
In 2023, some of its members started using the Chinese Yuan and the Russian ruble in its trading.
Brazilian President Luiz Inácio Lula da Silva, for example, wanted to created a common currency in South America similar to the Euro used by the European Union to reduce reliance on the dollar.
Earlier this year, Russian President Vladimir Putin hosted a summit with 20 world leaders urging them to ditch the dollar as well.
BRIC’s growing share of the world GDP and its stated intent to trade in other currencies – what experts call “de-dollarization” – didn’t come up much during the 2024 presidential campaign, but it has raised Trump’s ire since winning.
The president-elect said on Saturday there is “no chance” the bloc will replace the U.S. dollar in terms of global trade and that any foreign country, “should wave goodbye to America” if it tries to do so.
The latest tariff threat by Trump, weeks before he returns to power, is part of a larger foreign strategy aimed at U.S. foes and allies.
Trump has also trotted out possible 25% tariffs on everything imported from Mexico and Canada, and an additional 10% tax on goods from China, as a way to force the countries to do more to halt the flow of illegal immigration and drugs into the U.S.
