iGrain India - The article discusses a threat issued by the newly elected President of the United States, Donald Trump, against the BRICS countries, warning them of severe consequences if they proceed with plans to reduce the global dominance of the US dollar in trade.
Specifically, Trump threatened to impose a 100% customs duty on products from these countries if they attempt to create alternatives to the dollar as the primary reserve currency in international trade.
The BRICS nations involved include Brazil, Russia, India, China, South Africa, as well as Iran, Egypt, Ethiopia, and the UAE.
These countries are either exploring the creation of a new currency to rival the dollar, similar to the Euro, or are seeking to adopt alternative currencies to gradually diminish the dollar's role in global finance.
This challenge to the dollar's supremacy is significant, as it could impact the ability of emerging markets to participate more freely in global trade and access capital without being restricted by the dollar’s dominance. While many analysts consider such a move by BRICS to be difficult and unlikely to succeed,
they also see it as a signal of the growing desire among these nations to pursue economic independence from the US-dominated financial system.
Trump's warning also points to the broader geopolitical context, highlighting America's strained relationships with China, Russia, and Iran, but more cordial ties with India, South Africa, Brazil, and the UAE.
While the US has traditionally had friendly relations with India, Trump's remark about imposing harsh tariffs on BRICS members could potentially strain this relationship as well, especially given India's significant role within BRICS.
This potential escalation comes as trade experts note that if Trump follows through on such protectionist measures, it could have ripple effects on India, despite current strong trade agreements between the two nations.
However, India's Commerce and Industry Minister has downplayed these concerns, emphasizing the ongoing strong bilateral ties between the US and India.