Trump's comments come at a time of rising concern about the efforts of BRICS countries to create alternatives to the US dollar in international trade. The bloc, which represents emerging markets and a significant portion of the global population, has been exploring options such as a potential new currency or increasing the use of local currencies for transactions between member states. These moves have been perceived as a challenge to the long-standing financial dominance of the United States.
In his post, Trump stated, "The idea that the BRICS Countries are trying to move away from the Dollar, while we stand by and watch, is OVER. We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty US Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful US Economy."
Trump's warning comes after the BRICS summit held in 2023, where discussions about reducing reliance on the dollar in global trade were prominent. The bloc has been advocating for the use of alternative currencies, such as the Chinese yuan or regional currencies, to lessen dependence on the US dollar. This initiative is part of broader efforts by some countries to reshape global financial systems and reduce their exposure to what they view as an over-reliance on the US and its economic policies.
The US dollar, which currently accounts for about 60% of the world’s foreign exchange reserves and is used in around 80% of global trade transactions, has long been a cornerstone of the international financial system. Any attempt to challenge its dominance would have far-reaching implications for global trade, investment, and the economic leverage the United States holds on the world stage.
Trump’s aggressive stance on the matter is not new. During his presidency, he repeatedly emphasized the importance of the dollar’s primacy and warned of consequences for any nation or group of nations trying to undermine it. His remarks on Truth Social echo previous statements made about the economic consequences of de-dollarization, particularly in relation to China’s push for a more significant role for the yuan in global markets.
While the BRICS countries have not unified around a single plan to replace the US dollar, they have collectively expressed concerns about the dollar’s central role in the global economy, especially in light of Western sanctions and the perceived weaponization of the dollar against countries such as Russia. The ongoing geopolitical tensions have added fuel to the discussion on de-dollarization, with countries like Russia and China leading the charge in promoting alternatives.
China, in particular, has made significant strides in promoting the yuan as an international currency. It has been actively engaging in currency swap agreements with countries across Asia, Africa, and Latin America, allowing them to trade in yuan rather than the US dollar. Russia, similarly, has sought to increase its use of the ruble and other local currencies in trade with its partners, particularly following the imposition of sanctions over its actions in Ukraine.
Despite these efforts, the US dollar remains deeply entrenched in the global financial system, and its dominance is unlikely to erode quickly. However, the BRICS nations’ push for greater use of alternative currencies highlights a growing dissatisfaction with the current financial order, which many see as being too heavily influenced by the United States. The discussions within BRICS about creating a new currency or using regional alternatives have raised concerns in Washington, with many experts warning that such moves could undermine the stability of the global financial system.
Trump’s post is also a clear signal of his foreign policy posture should he decide to run for president again. His "America First" approach, which often involved challenging global norms and agreements, could lead to more confrontational policies toward countries seeking to reduce their reliance on the dollar. For Trump, this issue is not just about protecting the US economy but also about asserting the global power of the United States.