World Courant
Officers together with Chinese language President Xi Jinping, Russian President Vladimir Putin and Indian Prime Minister Narendra Modi attend the BRICS Summit in Kazan, Russia, on October 23, 2024.
Alexei Danichev | Reuters
President-elect Donald Trump on Saturday threatened 100% tariffs on a bloc of 9 international locations in the event that they act to undermine the US greenback.
His risk was geared toward international locations within the so-called BRIC alliance, which consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates.
Turkey, Azerbaijan and Malaysia have utilized to turn out to be members and several other different international locations have expressed curiosity in becoming a member of.
Though the US greenback is by far essentially the most broadly used foreign money in world enterprise and has survived challenges to its preeminence up to now, members of the alliance and different growing international locations say they’re fed up with US dominance within the world monetary system.
In keeping with the IMF, the greenback represents roughly 58% of the world’s international alternate reserves, and key commodities equivalent to oil are nonetheless primarily purchased and offered with {dollars}. Nonetheless, the greenback’s dominance is threatened by the BRICS’ rising share of GDP and the alliance’s intention to commerce in non-dollar currencies – a course of often called de-dollarization.
Trump stated in a Reality Social put up: “We’d like a dedication from these international locations that they may neither create a brand new BRICS foreign money nor help every other foreign money to interchange the mighty US greenback, in any other case they may face 100% tariffs, and they’d count on to say goodbye to gross sales to the great American financial system.”
At a summit of BRIC international locations in October, Russian President Vladimir Putin accused the US of “weaponizing” the greenback, describing it as a “large mistake.”
“It’s not us who refuse to make use of the greenback,” Putin stated on the time. “But when they do not allow us to work, what can we do? We’re compelled to search for options.”
Russia has particularly pushed for the creation of a brand new funds system that would offer a substitute for the banks’ world messaging community, SWIFT, and permit Moscow to evade Western sanctions and commerce with companions.
Trump stated there may be “no likelihood” the BRIC will substitute the US greenback in world commerce and that any nation making an attempt to make that occur ought to “say goodbye to America.”
Analysis reveals that the position of the US greenback as an important world reserve foreign money won’t be threatened within the close to future.
An Atlantic Council mannequin assessing the greenback’s place as the highest world reserve foreign money says the greenback is “protected within the quick and medium time period” and continues to dominate different currencies.
Trump’s newest tariff risk comes after he threatened to impose 25% tariffs on all the things imported from Mexico and Canada, and an extra 10% tax on items from China, as a option to power international locations to do extra to stem the circulation of unlawful immigration and medicines to the US
He has since held a cellphone name with Mexican President Claudia Sheinbaum, who stated Thursday she is assured a tariff battle with the US will be averted. Canadian Prime Minister Justin Trudeau returned dwelling on Saturday after a gathering with Trump, with no assure that the newly elected president will withdraw from threatened tariffs on Canada.
Trump is threatening 100% tariffs on the BRIC bloc of nations in the event that they act to undermine the US greenback
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