Trump threatens 100% tariff on Brics nations if they try to replace dollar

US President-elect Donald Trump has issued a stern warning regarding the potential creation of a new currency by the BRICS nations, a group of nine countries that includes major players like China and Russia. He stated that if these countries attempt to establish a rival currency to the US dollar, he would impose a staggering 100% tariff on their goods. Trump expressed his sentiments on social media, declaring, 'The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER. ' The BRICS alliance consists of Brazil, India, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates, alongside China and Russia. These nations are primarily emerging economies that are gaining significance in the global market. Throughout his presidential campaign, Trump emphasized the need for imposing tariffs on foreign goods, and his recent comments indicate a heightened seriousness about these threats. This latest statement was directed at the BRICS nations, which have been exploring the possibility of creating a new currency for international trade. However, internal disagreements among these countries have hindered any substantial progress toward this goal. Trump further elaborated, 'We require a commitment from these 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. ' He added, 'They can go find another sucker. ' Some of Trump's allies have suggested that his recent announcements may be more about negotiation tactics than actual promises. Republican Senator Ted Cruz commented on the president-elect's proposed use of tariffs, highlighting the 'importance of leverage' in negotiations. He noted that the threat of tariffs against Mexico and Canada has already prompted action from those countries. On Friday, Canadian Prime Minister Justin Trudeau visited Trump at his Mar-a-Lago estate in Florida, seemingly to prevent a potential 25% tariff on Canadian goods entering the US. Trump's nominee for Treasury Secretary, Scott Bessent, has previously indicated that the president-elect's threats of significant tariff increases are part of a broader negotiating strategy. Bessent stated, 'My general view is that at the end of the day, he's a free trader,' referring to Trump. He explained that Trump's approach is to 'escalate to de-escalate. ' To understand how tariffs work, it is essential to know that a tariff is a tax imposed on goods as they enter a country, based on the value of the imported item. For instance, if a car valued at $50,000 is imported to the US and is subject to a 25% tariff, the tax would amount to $12,500. Tariffs play a central role in Trump's economic vision, as he views them as a means to stimulate the US economy, safeguard jobs, and increase tax revenue. He has previously claimed that these taxes will not burden American consumers, asserting that they are 'not going to be a cost to you, it’s a cost to another country. ' However, this assertion is widely regarded by economists as misleading. The tax is ultimately paid by the domestic company that imports the goods, not the foreign company that exports them. In this sense, it is a straightforward tax that US firms pay to the US government. During his first term, Trump implemented numerous tariffs, many of which have remained in place under President Joe Biden. Economic studies suggest that the majority of the economic burden has ultimately fallen on US consumers.