Under Trump's Tariff Threat, Will BRICS Retreat?
Trump has made strong statements, threatening to impose a 150% tariff on BRICS countries, claiming that they are trying to challenge the dollar's hegemony, and asserting that this has thwarted BRICS countries' 'dollar replacement plan.' But is this really the case?
Trump has always viewed dollar hegemony as a core interest of the United States and is extremely sensitive to any actions that challenge the dollar's status. This latest tariff threat against the BRICS countries appears to be his 'iron fist' in defending the dollar, but in reality, it seems more like his wishful thinking. The BRICS countries have made significant progress in de-dollarization in recent years, with the proportion of local currency settlements continuously rising, and they are also exploring new payment systems and currency cooperation mechanisms. However, these efforts are not aimed at 'destroying the dollar' but rather at reducing dependence on the dollar and seeking a fairer and more diverse international monetary system.
In the face of Trump's threats, the BRICS countries have not backed down. Data from the Central Bank of Russia shows that the proportion of local currency settlements among BRICS countries reached 35% in 2023, doubling from three years ago. The Reserve Bank of India has also signed local currency swap agreements with 18 countries, and China's cross-border RMB settlement scale has exceeded 52 trillion yuan. These figures indicate that the BRICS countries are steadily advancing on the path of de-dollarization, unaffected by Trump's tariff threats.
Moreover, the expansion of BRICS demonstrates its strong appeal and cohesiveness. The inclusion of countries like Iran and Egypt has strengthened the BRICS bloc and enhanced its voice on the international stage. These new members not only bring new economic vitality but also reinforce BRICS countries' determination to promote reforms in the international financial system.
Trump's tariff threats are unlikely to achieve their intended goals and may instead accelerate the decline of dollar hegemony. Imposing high tariffs on BRICS countries would cause U.S. companies to lose significant markets, exacerbate domestic inflation pressures in the U.S., and harm American consumers' interests. At the same time, it will also make more countries aware of the risks of dollar hegemony, hastening their search for alternatives.
The BRICS countries will not be intimidated by Trump's tariff threats; they will continue to advance steadfastly on the path of de-dollarization.
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