The world could see a second wave of tariff war as Donald Trump takes office this January. The US President-elect has threatened a 100% tariff on the BRICS countries, including India, if they undercut the US dollar or replace it with another currency for international transactions. His remarks follow a BRICS meeting in October that discussed boosting non-dollar transactions. The BRICS grouping comprises Brazil, Russia, India, China, South Africa, and other countries.
In a scathing online post, Trump said this morning he is not going stand and watch the BRICS move away from the dollar.
"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% Tariffs, and should expect to say goodbye to selling into the wonderful US Economy," said the Republican leader who won a decisive victory in the presidential elections held last month.
Read: How Trump's New Tariff Policies Can Affect Asian Economies Including India
The President-elect suggested that the BRICS countries can go find another "sucker", but the group won't be able to replace the dollar in international trade with another currency. "They can go find another "sucker!" There is no chance that the BRICS will replace the US Dollar in International Trade, and any Country that tries should wave goodbye to America," said Trump.
BRICS and Dollar
The BRICS countries - which now include Egypt, Iran, and UAE as well - discussed boosting non-dollar transactions and strengthening local currencies at a summit held in Russia's Kazan in October.
A joint declaration for the "strengthening of correspondent banking networks within BRICS and enabling settlements in local currencies in line with BRICS Cross-Border Payments Initiative" was secured at the summit in October.
Read: How China's New Policy Aims To Evade Trump's Tariffs
However, Russia's President Vladimir Putin indicated at the summit's end that no alternatives have been made so far to compete with the Belgium-based SWIFT financial messaging system.
India, too, has said it's against de-dollarisation. In October, Foreign Minister S Jaishankar said that's neither a part of India's economic policy nor the country's political or strategic policies. But in cases where trade partners do not take dollars or when issues emerge due to trade policies, workarounds are looked at, he had said.
Trump, Tariffs, and India
India's tariff regime has roiled Trump in the past, and so have Brazil and China. His tariff plan for 2025 includes the concept of reciprocity against protectionist regimes. A month before the elections, Trump had clarified that this was the most important element in his plan to make the US "extraordinarily wealthy".
Read - "India Biggest Tariff Charger", Will Reciprocate If Elected To Power: Trump
"Reciprocity is a word that's very important in my plan because we generally don't charge tariffs. I started that process, it was so great, with the vans and the small trucks, etc. We really don't charge. China will charge us a 200 per cent tariff. Brazil is a big charger," he had said in October.
"The biggest charger of all is India," he had asserted, but along with praises for Prime Minister Narendra Modi and the India-US ties.
"I mean, I think they probably charge more than, in many ways, China. But they do it with a smile. They do it... Sort of a nicer charge. They said thank you so much for purchasing from India," he had said at the Detroit Economic Club.
