WEST PALM BEACH, Fla. (AP) – President-elect Donald Trump on Saturday threatened 100% tariffs on the bloc of nine countries if they depreciate the US dollar.
His threat is aimed at countries in the BRIC group, which includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates.
Turkey, Azerbaijan and Malaysia have applied for membership and several other countries have expressed interest in joining.
Although the American dollar is the most used in international business and has survived its past crisis, the members of this association and other developing countries say that they are concerned about America’s dominance in financial matters around the world.
The dollar represents 58% of the world’s foreign exchange, according to the IMF and major commodities such as oil are still bought and sold using dollars. The dominance of the dollar is threatened, however, by the BRICS’ growing share of GDP and the union’s intention to trade in non-dollar currencies – a process known as de-dollarization.
Mr. Trump, in the True Social post, said: “We need a commitment from these countries that they will not create a new BRICS currency, or return another Currency to replace the strong US Dollar or, they will face 100% Tariffs, and they should expect to say well to trade in the US Economy is amazing.”
At the BRIC summit in October, Russian President Vladimir Putin accused the US of “using” the dollar and described it as a “big mistake.”
“It’s not us who refuse to use the dollar,” Putin said at the time. “But if they stop us from working, what should we do? We are forced to find other ways.”
Russia has actively promoted the creation of a new payment system that would provide an alternative to the international bank messaging system, SWIFT, and allow Moscow to evade Western sanctions and trade with its partners.
Trump said there is “no chance” BRIC will replace the US dollar in global trade and any country that tries to make this happen “must be visible to America.”
Research shows that the US dollar’s role as the world’s primary currency is not threatened in the near future.
The Atlantic Council’s analysis of the dollar’s position as the world’s leading currency says the dollar is “safe in the near term” and continues to dominate other currencies.
Trump’s latest threat of tariffs comes after he threatened to slap a 25% tariff on all imports from Mexico and Canada, and an additional 10% tariff on goods from China, as a way to force the country to do more to stop the flow of illegal immigrants and. drugs into the US
After making a phone call with the president of Mexico, Claudia Sheinbaum, he said on Thursday that he is confident that the tax war with the United States can be avoided. Canadian Prime Minister Justin Trudeau returned home on Saturday after meeting with Mr. Trump, with no guarantee that the president-elect would abandon the threatened tariffs on Canada.