Trump threatens 100% tariff on BRICS countries seeking to replace U.S. dollar

America President-elect Donald Trump has said he would require BRICS countries, a China-and Russia-backed group of emerging economies to commit to not creating new currency or face 100 per cent tariffs during his administration.

“The idea that the BRICS countries are trying to move away from the dollar while we stand by and watch is over. 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 U.S. Dollar, or they will face 100 per cent tariffs, and should expect to say goodbye to selling into the wonderful U.S. economy,” Trump posted on Truth social media.

BRICS is made up of Brazil, Russia, India, China and South Africa. Earlier this year, Iran, Saudi Arabia, the United Arab Emirates, Ethiopia and Egypt formally joined the first expansion in over a decade.

If this eventually happens, Nigeria would be affected as it would be recalled that barely two months ago, the country officially joined BRICS as a partner country, alongside 12 other nations, in a bid to strengthen its economic ties with the intergovernmental bloc.

Nigeria’s inclusion came on the heels of a significant surge in foreign capital inflows from BRICS nations, which rose by 189 per cent in H1 of 2024, reaching $1.27 billion, compared to $438.72 million during the same period in 2023.

BRICS was formed in 2009 to challenge what some governments, including Russia and China, have described as U.S. global dominance.

Last year, Russia’s Foreign Minister, Sergey Lavrov, urged the international community to crush the alleged hegemony led by the U.S through a sustained reduction in the use of the U.S. dollar for trade and bilateral transactions.

Thirty-four countries have submitted an expression of interest in joining the bloc of major emerging economies, South African Foreign Minister Naledi Pandor said in February. The leader of one member country, Brazil’s Luiz Inácio Lula da Silva, in 2023 proposed creating a common currency in South America to reduce reliance on the U.S. dollar.

BRICS currencies and banking networks outside the U.S. dollar-denominated system could allow member countries such as Russia, China and Iran to circumnavigate Western sanctions. But the chances of a new currency are probably slim due to the alliance’s economic and geopolitical differences. The expanding group is valuable to China as it looks to forge closer partnerships with key players to challenge the United States’ global leadership. And it’s also a boon to Russia, which has been shunned economically and diplomatically by the West following its 2022 invasion of Ukraine. This year, Russia assumed rotating chairmanship of the group.

During a BRICS summit in October, Russian President, Vladimir Putin and Chinese leader, Xi Jinping sought to project the message that the West stands isolated in the world, while a global majority of countries support their bid to challenge American global leadership. Trump’s latest economic threat comes days after he pledged massive hikes in tariffs on goods coming from Mexico, Canada and China starting on the first day of his administration.

The move, Trump said, will be in retaliation for illegal immigration and “crime and drugs” coming across the border. Since that announcement, Trump spoke with Mexican President, Claudia Sheinbaum for the first time following the tariff announcement, but they have offered conflicting statements about the call. Canadian Prime Minister, Justin Trudeau, meanwhile, travelled to Trump’s Mar-a-Lago estate in Florida to meet with the president. Trudeau said the dinner with Trump was an excellent conversation, and the president-elect called it a very productive meeting.