With the US president-elect targeting the BRICS bloc in 2025, many experts are worrying that the real threat to the US dollar lies eternally, not with BRICS. Donald Trump recently demanded that the BRICS nations “commit” that “they will neither create a new BRICS Currency nor back any other Currency to replace the mighty U.S. Dollar.” Trump also backed this threat with several tariff increases. However, could these backfire and harm the dollar more?
One Bloomberg analyst says that if Trump wants to maintain the dollar’s primacy, he should recognize that its value is not dependent on American power and threats, but on American reliability. How much could his incoming presidency harm BRICS, or the US dollar itself?
To Pursue or Not Pursue De-Dollarization: What are BRICS’ Plans?
South Africa released an official statement to affirm no common currency was planned. Furthermore, India’s foreign minister insisted that BRICS nations had “no interest in weakening the US dollar.” Even Russia’s President Putin said last month that the bloc isn’t aiming to destroy the greenback. That mission may still be carried through by the US itself though, putting the bloc in an advantage in 2025.
The BRICS bloc’s true mission appears not to be hurting the US economy or to challenge the primacy of the dollar. They want to instead carve out a section of the financial system that isn’t subject to US power. The US, however, hasn’t done well to keep its native currency strong over the last few years. The 2020 pandemic saw the dollar weaken dramatically, and nations around the world grew frustrated with the currency.
Trump to do More Harm to US Dollar Than BRICS?
Additionally, Trump’s Tariff plan may also do more harm than good to the US economy. If enacted, the tariff could be the catalyst for inciting continued efforts to abandon the US dollar on a global scale. In a post to Truth Social, Trump previously said, “We require commitment from these countries that they will neither create a new BRCIS 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.” Although BRICS nations have previously said that they would not seek to ditch the currency, Trump’s policies could drive a necessary recalculation of what would be best for these countries.
The imposition of Western sanctions drove Russia to initiate de-dollarization efforts through its BRICS alliance. The weaponization of the greenback saw the bloc further enhance trade deals, ultimately leading to the promotion of local currency trade. That will only enhance under Trump’s tariff plan. Moreover, it will harm American industries. The current efforts to ditch the US dollar wouldn’t have the same effect on imports that the incoming president would.
Russian spokesperson Dmitry Peskov addressed Trump’s recent warning for the alliance specifically. “More and more countries are switching to the use of national currencies in their trade and foreign economic activities,” he said.
The global trade market is now as hungry as ever for a US dollar alternative. Several countries within BRICS are switching to local currencies, and even pursuing new reserve currencies not named USD. With Trump looking to put an iron fist on BRICS and USD opposers, the damage and fears may start growing more from the inside than his targets. The US may no longer be the middleman for many countries in global trade soon if the US dollar is indeed abandoned.
