Newly inaugurated US President Donald Trump has announced plans to impose a 100% tariff on BRICS nations, including India, if they continue efforts to reduce the US dollar’s role in global trade. The move, made during his first day in office, could strain trade relations between Washington and New Delhi.
Key Highlights
- Tariff Announcement: President Trump declared that BRICS nations would face 100% tariffs if they “even think about doing what they thought,” referring to initiatives to reduce dependency on the US dollar in global transactions.
- Clear Stance: Trump emphasized his statement was not a threat but a firm policy to protect US interests.
- Disagreement with Biden: He dismissed former President Joe Biden’s claims of US vulnerability in this situation, asserting that America holds leverage over the BRICS nations.
Trump’s Remarks
While signing executive orders at the Oval Office, Trump said:
“If the BRICS nations want to do that, that’s OK, but we’re going to put at least a 100 per cent tariff on the business they do with the United States. It’s not even a threat—it’s a stance.”
He highlighted that his position has already caused BRICS nations to reconsider their plans.
Background: BRICS and De-Dollarization
BRICS—comprising Brazil, Russia, India, China, and South Africa—has been exploring alternatives to the US dollar in global trade, including discussions of a new currency.
- In December 2024, even before his inauguration, Trump warned BRICS nations against creating a dollar alternative and hinted at steep tariffs if commitments were not made.
- BRICS de-dollarization efforts are part of a broader strategy to reduce reliance on the US dollar and enhance economic autonomy.
Potential Impact on US-India Trade
India, a key member of BRICS, could face significant repercussions:
- The 100% tariff could increase the cost of Indian exports to the US, disrupting trade flows.
- Bilateral relations, already under strain from geopolitical and economic issues, may further deteriorate.
Conclusion
President Trump’s aggressive tariff policy underscores his administration’s intent to safeguard the US dollar’s global dominance. As tensions with BRICS nations escalate, the global trade landscape could face significant shifts, with potential ripple effects on economies worldwide.
It remains to be seen how BRICS nations, including India, respond to this assertive stance.
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