Is the Dollar’s Reign Under Threat from BRICS?

Can Trump's 100% Tariff Threat Really Save the Dollar? Alright, here’s the deal. The US dollar has been the quarterback of global trade for decades, the MVP everyone relies on. But now, some countries are looking to switch teams, and Donald Trump is not having it. The President-elect, never one to shy away from bold moves, issued a fiery warning to BRICS nations: mess with the dollar, and you’ll face a 100 percent tariff on your exports to the US. So, here’s the million-dollar question: will Trump’s tough talk keep the dollar on top, or could this move backfire and push these countries even closer to ditching it?

A Bold Move or Bluff?

Donald Trump’s Truth Social post left no room for misinterpretation: the dollar’s dominance in global trade is non-negotiable, and any attempt to undermine it will face consequences. It’s classic Trump, reminiscent of his first-term tariff crusades. Back then, he slapped tariffs on over $200 billion of Chinese goods and threatened Mexico and Canada over issues like migration and fentanyl.

But here’s the catch, can Trump pull this off? Experts aren’t so sure. US laws generally tie tariffs to specific trade violations, not broader geopolitical moves like de-dollarization. Plus, how do you even measure when a country has “moved away” from the dollar? While Trump has a track record of wielding tariffs as a weapon, the legal and practical hurdles of this threat make its effectiveness questionable.

BRICS vs. the Dollar

BRICS, formed in 2009, now includes Iran, Egypt, and the UAE, representing nearly half the world’s population. But when it comes to challenging the dollar, this bloc is anything but united. Russia and China are leading the charge Russia, is desperate for alternatives after sanctions, and China, pushing its renminbi through massive projects like the Belt and Road Initiative. Meanwhile, India is playing it cool. With $120 billion in annual trade with the US, it’s not eager to rock the boat and risk economic stability.

Then there’s the elephant in the room—China’s dominance. Smaller BRICS nations like India and Brazil worry Beijing might steer the bloc to suit its own agenda. While everyone agrees the dollar’s dominance is worth challenging, internal rivalries make a united BRICS front unlikely anytime soon.

De-Dollarization or Just a Detour?

A shared BRICS currency sounds bold, but the reality? It’s a tough nut to crack. Countries like India and Brazil would have to give up monetary control, a move they’re not keen on during uncertain times. Then there’s China, whose massive economy raises concerns it would dominate the currency. As former RBI Governor Duvvuri Subbarao noted, a BRICS currency would likely be unstable and heavily influenced by Beijing, making it a hard sell for smaller members.

Instead, BRICS nations are exploring practical alternatives like trading in national currencies. While the idea of a common currency grabs headlines, internal politics, and economic realities make it a distant dream. For now, de-dollarization is taking smaller, more cautious steps.

A Tough Trade-Off?

Here’s the thing about tariffs: they don’t just hit other countries—they can hit the US too. A 100 percent tariff on BRICS imports might sound tough, but it could mean pricier goods for American shoppers. From groceries to gadgets, everyday items could become a lot more expensive. It’s not just consumers who’d feel the pinch. US exporters could also lose out if retaliatory measures make American goods less competitive abroad. Experts warn Trump’s strategy could accelerate de-dollarization—the very thing he’s trying to prevent.

Fun Fact: Did you know over 90 percent of global transactions still rely on the dollar? That’s a big deal, but aggressive tariffs could push more countries to explore alternatives, furthering the move toward trading in national currencies. In trying to protect the dollar, the US risks losing its edge in global trade. Some economists argue it’s like trying to win a race while tripping over your own shoelaces.

Why the Dollar Isn’t Going Anywhere

For all the noise about de-dollarization, the US dollar isn’t going anywhere. It dominates 88 percent of global forex turnover and remains the world’s favorite reserve currency. As one expert put it, "The dollar isn’t just a currency—it’s a cornerstone of global trade." Why do countries stick with it, even when frustrated by US sanctions? Simple—trust and stability. The dollar is backed by the world’s largest economy and remains the safest bet during global uncertainty. While Russia and China push alternatives, their efforts have gained little traction. Even within BRICS, disagreements and fears of China’s dominance prevent real progress. For now, the dollar’s reach and reliability keep it firmly in the driver’s seat.

Saving or Sinking the Dollar?

Trump’s 100 percent tariff threat is a high-stakes gamble. While it aims to protect the dollar’s dominance, the risks are clear: higher prices for American consumers, strained trade relations, and possibly even speeding up the de-dollarization trend he’s fighting against. The big question remains: as the global economy shifts, will Trump’s bold move solidify the dollar’s supremacy or push it closer to the edge?  “Want more insights on global trade and economic policies? Subscribe to our weekly newsletter for expert analysis delivered straight to your inbox.”