Trump asks BRICS countries to pledge not to create new currencies and de-dollarize the United States The United States will impose 100% tariffs |

Trump Intensifies Battle Against De-Dollarization, Threatening 100% Taxes on BRICS Nations

Former President Donald Trump is once again making headlines with his bold economic pronouncements. In a recent post on his platform Truth Social, Trump declared the "end" of the era where countries attempt to move away from the US dollar, particularly targeting the BRICS group of emerging economies.

Trump’s renewed focus on de-dollarization pits him against a growing movement aiming to reduce reliance on the US dollar for international trade and finance. The BRICS nations – Brazil, Russia, India, China, and South Africa – are at the forefront of this effort, with recent additions including Iran, the United Arab Emirates, Ethiopia, and Egypt.

The former president’s warning comes amid concerns that the BRICS group, fueled by China’s growing economic clout and Russia’s desire to circumvent Western sanctions, might create a new international reserve currency.

“The BRICS countries are trying to get rid of the dollar, and the impression that we are sitting on the side has ended,” Trump wrote.

He went on to threaten a 100% tax on BRICS nations that attempt to establish a new currency or use alternatives to the US dollar, stating, "We will ask for a commitment from the BRICS countries that they will not create a new BRICS currency or support any other currency to replace the mighty US dollar, otherwise they will be subject to 100% taxation and should be prepared to say goodbye to the good old days of America selling goods.”

This hardline stance echoes Trump’s campaign promises to punish nations attempting to ditch the dollar and mirrors strategies detached during his first term, which included export controls, allegations of currency manipulation, and imposing trade taxes.

Trump’s determination to maintain the dollar’s global dominance is unequivocal. In a CNBC interview earlier this year, he stated, "No let countries abandon the US dollar because it will be a blow to our country.”

The global economy seems to be bracing for what could be another turbulent period as Trump’s assertive stance sets the stage for potential trade wars and financial upheaval.

Michael Pettis, a senior fellow at the Carnegie Endowment for International Peace, characterized Trump’s warning as a sign of the approaching administration’s troubled relationship with the global trade and capital system.

While existing rivals to the dollar, like the Chinese yuan, have made some headway, the infrastructure supporting the dollar, particularly in cross-border payment systems, offers a significant advantage to the greenback in the years to come.

Trump’s claims about the potential success of de-dollarization efforts were evident at the recent BRICS summit in Kazan, Russia. Despite Putin’s advocacy for weakening the dollar’s international role, attendees were encouraged to bring dollars or euros, highlighting the limited feasibility of bypassing the US dollar.

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Trump’s latest threats to impose tariffs on goods from Mexico and Canada echo his earlier protectionist measures. This strategy, aimed at reducing trade deficits, has drawn criticism for escalating tensions with key allies and potentially jeopardizing long-standing trade agreements.

Amidst these threats, China, the world’s second-largest economy, is exploring ways to mitigate the impact of potential Trump tariffs. Some analysts speculate China could allow the yuan to depreciate, a move that could undercut the effectiveness of U.S. trade policies.

As the world watches, the expansion of the BRICS group, fueled by shared concerns about US dollar dominance and the desire to pursue alternative financial arrangements, adds another layer of complexity to the global economic landscape.

The potential for a new BRICS currency, while seemingly challenging, cannot be entirely dismissed. The inauguration of Lula da Silva, the new president of Brazil, who proposed a common South American currency, underscores the growing momentum behind this movement.

Ultimately, the success of any de-dollarization efforts depends on a complex interplay of economic, political, and geopolitical factors. The coming months and years will likely witness a struggle for global economic influence, with the fate of the US dollar hanging in the balance.

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2024-12-02 04:00:00