Unhinged Trump Threatened The BRICS !

The global economic order is at a potentially transformative turn as the BRICS nations increasingly mount a challenge to the United States dollar’s long-standing supremacy in international trade. Formed in 2009, the BRICS alliance, which includes – Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates, among others, has actively explored alternatives to the dollar-dominated financial system.

The motivations behind the formation of the group emanate from its desire to reduce dependence on the dollar and establish a more balanced international economic framework.

The historical context of this challenge is very crucial. Since the Bretton Woods Agreement of 1944 to this date, the U.S. dollar has been the world reserve currency. This position provides the United States with extraordinary economic leverage. Such monetary influence has enabled the U.S. to impose economic sanctions on others, dictate global financial policy, and also have mighty influence over global politics. This usually comes with a feeling of uneven competition in the sense that the economies of developing countries are highly influenced by U.S. monetary policy.

The dollar’s present hegemony is suffocating. As per the International Monetary Fund, the U.S. dollar comprises roughly 58 per cent of the global foreign exchange reserve. Oils and gold, deemed essential commodities, are overwhelmingly traded in dollars, a testament that the currency is still engrained in how the world thinks. Recent global power maneuvers and the economic multipolarity that is emerging have made BRICS countries give alternative monetary alternatives a serious thought.

Notadollar’ssian President Vladimir Putin referred to the dollar as a “weapon” with economic might. As of last October, he has even requested a new international payment system, intended to depict impatience from the BRICS nations about financial hegemony exercised by the U.S. Another world came forth from Brazilian President Luiz Inácio Lula da Silva in the proposition for South America to develop its common currency so as not to be dependent so much on dollars in foreign trade.

Trump’s Provocative Tariff Threat

U.S. president-elect, Donald Trump, has entered this hostile economic environment with a sensational threat. Through his social media platform, Truth Social, Trump warned the BRICS countries that they would have 100% tariffs imposed on them if they pursued an alternative to the U.S. dollar.

The threat is direct: “We need an assurance from these Countries that they will not create a new BRICS Currency and will not back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs.”

While so aggressive an economic posturing is a new development in historical precedent, Trump’s approach has echoes from protectionist strategies in U.S. economic history but with a more confrontational tone. His threat is a mix of economic nationalism and diplomatic style he u “ed in his first presidential term.

Its feasibility and legality still need to be clarified. Former Governor of the Reserve Bank of India, Duvvuri Subbarao, lambasted critical questions surrounding the feasibility of Trump’s proposal.

“What yardstick will America use to determine if a country has moved out of the dollar? And does American law permit imposing sanctions on countries merely because they are de-dollarising?” Subbarao’s scepticism represents the broader opinion of many economic experts who believe Trump’s threat is more rhetoric than realistic policy.

Legal scholars suggest that a 100% tariff would be impossible to impose. International trade agreements, the regulations of the World Trade Organization, and U.S. domestic trade laws would probably prevent a unilateral move as such. Further, it may breach some of the international commitments existing with respect to tr” ding and also might lead to retaliatory action by such countries involved.

For instance, Mark Weinstock of Pace University believes that BRICS nations cannot establish a workable alternative currency in the short or intermediate term. Competition for a new currency is challenging because the U.S. economy appears relatively solid, its financial institutions seem to have institutional integrity, and investors globally are attracted to buying U.S. government debt.

Economic And Political Challenges Of A BRICS Currency

The prospect of one single currency for BRICS is a long way off. Subbarao said member countries, particularly India, would shun the idea of giving up sovereignty over monetary policy. Economic and political reasons make a single currency a “non-starter” in such an unstable group of nations.

The dollar’s present hegemony is suffocating. As per the International Monetary Fund, the U.S. dollar makes up roughly 58 percent of global foreign exchange reserve. Oils and gold, deemed essential commodities, are overwhelmingly traded in dollars, a testament that the currency is still engrained in how the world thinks. Recent global power maneuvers and the economic multipolarity that is emerging have made BRICS countries give alternative monetary alternatives serious consideration.

Of the BRICS nations, China perhaps stands best to challenge dollars. In the past decade, the internationalization of RMB in China was a success wherein a good proportion of trade is either invoiced and settled with its national currency. China’s expansive economic footprint via the BRI further expanded with quite a number of loans denominated in RMB.

On the other hand, India still largely remains dependent on hard currencies, mainly the U.S. dollar. The Indian rupee has to go a long way to become a global currency. Moreover, any BRICS currency is likely to be dominated by the economic might of China, which deters other member nations.

Expert Views On The BRICS Currency Issue

Critical context from renowned international trade expert Eswar Prasad from Cornell University is very useful here. “The dollar’s dominance isn’t just about economic metrics,” he says. “It’s about an entire ecosystem of financial trust and institutional credibility.” For him, building an alternative currency involves more than just the weight of a nation’s purse strings. Instead, there must be sound financial systems, government, and monetary policy in that country.

The Chief Economist of the World Bank, Dr. Carmen Reinhart put this in historical perspective. “Currency transitions are rarely smooth,” she says. “The fall of the British pound and the rise of the dollar teaches us that it’s not only a matter of economic size-though that helps. What is more important is international confidence, financial infrastructure, and geopolitical influence.”

Economist Raghuram Rajan, former RBI Governor, says there are inherent problems in BRICS. “Each member has fundamentally different economic priorities,” he observes. “China wants influence in global finance, Russia wants bypass sanctions, India wants economic stability and Brazil and South Africa have more regional economic concerns.”

Ian Bremmer, an International trade expert adds, “This is not just an economic debate—it’s a power play,”. Further he days,”BRICS is a direct challenge to the U.S. global economic hegemony. The currency debate is a symbolic battlefield where emerging economies are asserting their collective economic sovereignty.”

A few experts, including the Blavatnik School of Government’s Dr. Ngaire Woods – still see a potential despite strong caveats. “A BRICS currency would not replace the dollar; it might just create meaningful alternative financial networks,” advises Woods. “In reality, the real effect could be establishing parallel economic systems that yield more flexibility to emerging economies.”

Ironically, not all experts on BRICS believe that a single currency is a must. The economist Alec Chrystal, of the City University of London claims that the differences are just too huge. “The differences in inflation rates, structures, and monetary policies among the BRICS nations make it rather more a theory than reality,” he said.

The technological dimension will not be ignored; digital currencies and blockchain technologies add further angles to the debate. According to many experts, a digital BRICS currency would be preferable over the variant because it could accommodate more flexibility and perhaps at lower transaction costs.

Dr. Arvind Subramanian, former Chief Economic Advisor to the Indian Government provides a measured perspective. “What we are seeing is not a direct replacement of currency but strategic repositioning,” he observes. “BRICS is building alternative financial mechanisms that can exist side by side with, not necessarily replace, the dollar-centric system.”

The Technological And Digital Currency Dimension

The appearance of digital currencies and blockchain technologies brings to the currency discussion of BRICS another layer of complexity. China has taken a leading role in developing central bank digital currencies, which might be a technological platform for alternative international payment systems.

Russia and China have been considerably more proactive in exploring other options for digital currency which could cut down dependence on a dollar. Their approach makes for a long-term strategy of building parallel financial infrastructures capable of working independently of traditional, west-controlled financial systems.

That technological approach may provide more flexible ways for BRICS countries to challenge the dollar’s position, bypassing some traditional obstacles to the creation of a new physical currency.

Reaction To The Threat And Implications

The reaction to Trump’s threat has been a mixed one, however some economists, such as Brad Setser of the Council on Foreign Relations, argue that such aggressive posturing undermines the role of the dollar in the world. The threat could lead other countries to accelerate in moving away from dollar dependence-which is paradoxical against the intent of the message of Trump.

These changes are under close observation of global financial markets and central banks. A high degree of fragmentation of the present monetary system may lead to increased volatility and uncertainty. Multinational corporations, which have international trade based on stable currency mechanisms, would be especially affected by a significant shift in the global currency landscape.

This speculation has already been dampened by a statement from South Africa to the effect that the BRICS countries are not in any plan to come up with yet another currency. Instead, the focus is on trading within member countries using their national currencies.

If Trump follows through on his threatened 100 per cent tariffs on imports (which most experts view as extremely unlikely), this will hit consumers in the United States hard. Importing goods from BRICS nations, like Brazilian coffee, Chinese electronics and clothing, and South African minerals, would see the prices jump sharply, with potential implications for inflation and, ultimately, higher consumer outlays.

Global Economic Balance

The challenge of the new BRICS currency and overseas tariff threat is much broader, a melting pot of global academic ambition, ditto economic intimation combined with divergent national self-interest. Although the U.S. dollar leaves everyone with its balls at present, increasing anger of emerging markets means that the global financial order is not eternal.

The BRICS nations want more economic sovereignty, but how they will achieve it is a mystery. Establishing a viable alternative currency is steep and involves much more than economic might; it involves institutional credibility and international trust.

As the world watches, one thing becomes precise: The future of international finance will be defined by complex negotiations and an ever-changing balance of economic power. In other words, the BRICS challenge to dollar supremacy may not be about overthrowing the status quo immediately but about changing the global economic landscape gradually.

This is not a debate about dollars and cents; it is a reflection of the changing dynamics of geopolitics of the 21st century, therefore the emerging markets demanding better treatment and a better representation at the global economic table.