The possible implications of a 100% tariff on BRICS countries

Through the social network Truth Social, the recent president-elect Donald Trump threatened to impose 100% tariffs on the countries that make up the political and economic forum called BRICS if agreements to replace the US dollar with another alternative currency continue.

The president wrote on the platform on November 30: “We demand a commitment from these countries that they will not create a new BRICS currency or support any other currency to replace the powerful US dollar.” or they will face 100% tariffs and must expect to say goodbye to sales in the wonderful American economy,” Trump said.

Within the forum integrating emerging countries such as Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates In 2023, the possibility of creating an alternative currency that would replace the dollar was raised to trade between them and stop depending on the US currency in international trade.

So far, the idea of ​​an alternative currency is just a proposal so the tycoon could be anticipating scenarios that may not exist in the future.

This may be due, first of all, to the fact that The creation of a common currency within the BRICS would be an enormous task taking into account that although these countries are among the economies with the largest and fastest growth currently in the world, they are still in different phases of development both economically and politically.

And secondly, the rhetoric used by some member countries of the forum who assure, as in the case of the South African Government, that there are no plans to create a common currency and that the information given on the subject is “erroneous” and reinforces falsehoods. narratives about the group’s objectives.

Third, despite the fact that these countries seek to boost their own economies without depending on the dollar, even proposing payment systems. The US dollar continues to be the most used currency for negotiations and reserves in the world.

In this regard, Mark Weinstock, global trade expert and economics professor at Pace University, highlights that “Economically, it is not a major problem because the idea that the BRICS countries can create an alternative reserve currency for the US dollar is not plausible. in the short or medium term.”

Now, Trump’s threat to the BRICS comes recently with his announcements of a 60% tariff increase on imports from China and its commercial neighbors Mexico and Canada 25%. If these adjustments are established, the consequences will be higher prices for consumers. “That’s always the impact of the tariff,” Weinstock noted.

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