This threat, which raises fears of a trade war, targeted the countries of the so-called BRIC alliance, which consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates.
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President-elect Donald Trump on Saturday threatened to impose tariffs of 100 % to a bloc of nine countries if they acted to weaken the US dollar.
His threat was aimed at the countries of the so-called alliance BRICS+which consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates.
Turkey, Azerbaijan and Malaysia have applied to become members and several other countries have expressed interest.
While The US dollar is by far the most used currency in world trade and has survived past challenges to its pre-eminence, alliance members and other developing countries say they are fed up with U.S. domination of the global financial system.
The dollar represents approximately 58% of global foreign exchange reservesaccording to the IMF, and major commodities, like oil, are still primarily bought and sold in dollars. The dollar's dominance, however, is threatened by BRICS' growing share of GDP and the alliance's intention to trade in currencies other than the dollar – a process known as “dedollarization.”
In a message posted on Truth Social, Mr. Trump said: “We demand that these countries commit not to create a new BRICS currency, nor to support another currency to replace the powerful US dollar, otherwise what they will be subject to 100% tariffs and will have to expect to say goodbye to their sales in the wonderful American economy ».
“Militarize” the dollar
At a summit of BRICS nations in October, Russian President Vladimir Poutine accused the United States of “weaponize” the dollar and described this decision as “big mistake”.
“It is not us who refuse to use the dollar,” Mr. Putin declared at the time. “But if they don’t let us work, what can we do? We are forced to look for alternatives.”
Russia has particularly insisted on the creation of a new payment system that would offer an alternative to the global banking messaging network, SWIFTand would allow Moscow to dodge Western sanctions and trade with its partners.
Mr. Trump said there was no “no chance” that BRICS will replace the US dollar in global trade and that any country that attempts to achieve this “should say goodbye to America.” “ They can go get another pigeon “, he concluded in his traditional succinct manner.
Studies show that the role of the US dollar as the main global reserve currency is not under threat in the near future.
An Atlantic Council model that assesses the dollar's place as the world's leading reserve currency says the dollar is “secure in the short to medium term” and continues to dominate other currencies.
Mr. Trump's latest tariff threat comes after he threatened to impose 25% tariffs on everything imported from Mexico and Canadaas well as an additional 10% tax on goods from China, in order to force these countries to do more to stop the flow of illegal immigration and drugs to the United States.
He has since spoken with Mexican President Claudia Sheinbaum, who said Thursday she was confident a tariff war with the United States could be avoided. Canadian Prime Minister Justin Trudeau returned home on Saturday after meeting with Mr. Trump, without having received assurances that the president-elect would return to the threats of customs duties weighing on Canada.
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