Trump threatens South Africa and BRICS nation with 100% tarrifs

President-elect Donald Trump has issued strong warnings to BRICS nations, demanding they abandon efforts to create a currency that challenges the US dollar. On Truth Social, Trump declared, “The idea that the BRICS Countries are trying to move away from the dollar while we stand by and watch is OVER,” threatening 100% tariffs on nations that proceed.

Trump insists the US dollar must remain the global reserve currency, pledging steep economic penalties for those who deviate. His stance stems from concerns about de-dollarization, a key topic during recent BRICS summits as countries like Brazil, Russia, India, China, and South Africa explore alternatives. The BRICS bloc expanded this year, adding Iran, UAE, Ethiopia, and Egypt, amid rising frustration with dollar dominance, especially following US sanctions on Russia.

Critics like Michael Pettis from the Carnegie Endowment for International Peace argue Trump’s approach is flawed, noting, “The US cannot both reduce its trade deficit and increase the global dominance of USD.” Despite this, Trump’s economic advisers are exploring aggressive policies, including export controls and accusations of currency manipulation, to prevent de-dollarization.

Trump’s tough rhetoric has already impacted global markets, including threats of tariffs on Canada, Mexico, and China. JPMorgan predicts China may respond with a significant yuan devaluation, while emerging-market currencies could weaken by 5% in 2025.

Though BRICS nations aim to reduce reliance on the dollar, the entrenched global infrastructure supporting USD makes such a shift challenging. Ironically, even at Russia's October summit promoting de-dollarization, attendees were advised to bring US dollars or euros for transactions.

For Trump, the fight to uphold the dollar is central to his economic agenda as he prepares for his second term.