On February 1, 2025, US President Donald Trump issued a stark warning to BRICS nations, threatening to impose a staggering 100% tariff on any country that attempts to establish a gold-backed currency as an alternative to the US dollar. This statement was made via his Truth Social account, where Trump emphasized that any challenge to the dollar's dominance would lead to severe economic consequences for those involved [fa9212c7].
This warning comes just two weeks after Nigeria officially joined BRICS as its ninth member on January 17, 2025. Nigeria's partnership with BRICS is aimed at promoting inclusive growth and regional integration, which adds a layer of complexity to the ongoing tensions between the US and BRICS nations [7f0ff5f5]. The BRICS alliance, which includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, Indonesia, and the UAE, has been increasingly vocal about exploring alternatives to the US dollar, particularly since discussions began in 2014 about reducing reliance on the dollar [fa9212c7]. Leaders like Brazil's Lula da Silva and Russia's Vladimir Putin have reaffirmed their commitment to lessening the dollar's dominance in global trade [cb0c26d3].
Despite these efforts, the US dollar remains the dominant global reserve currency, accounting for over half of global reserves and being used in 90% of currency market transactions [fa9212c7]. Economists warn that Trump's proposed tariffs could have adverse effects on American consumers and the economy at large, potentially increasing the costs of imports such as coffee and electronics [cb0c26d3].
In response to Trump's threats, Kremlin spokesperson Dmitry Peskov downplayed the potential impact, suggesting that such actions would ultimately backfire on the US [fa9212c7]. Indian officials have also dismissed Trump's claims regarding de-dollarization efforts, reaffirming their commitment to BRICS and emphasizing that decisions within the bloc are made by consensus. Congress MP Shashi Tharoor criticized Trump's threats as 'empty,' noting that there is no serious proposal for an alternative BRICS currency and highlighting the practicality of the US dollar for most countries [fa9212c7].
The Nigerian Ministry of Foreign Affairs confirmed its partnership with BRICS, aligning with Nigeria's aspirations for growth and the benefits of joining a bloc that is actively discussing reducing reliance on the US dollar [fa9212c7]. This partnership adds complexity to the ongoing tensions between the US and BRICS nations, particularly as Trump's tariff threats could significantly impact Nigeria's economy and its trade relationships.
In addition to targeting BRICS, Trump has indicated plans to impose a 25% tariff on Canada and Mexico, aiming to curb illegal drug trafficking and migration from these countries. His nominee for commerce secretary, Howard Lutnick, suggested that tariffs could be avoided if Canada and Mexico take decisive action against fentanyl trafficking [fa9212c7].
As BRICS continues to explore alternative payment systems, including the potential for a shared currency, the geopolitical dynamics surrounding currency use are rapidly evolving. The bloc is promoting the use of national currencies in trade, with countries like China and Russia already trading in yuan and rubles. Furthermore, BRICS has pooled $100 billion in foreign-currency reserves to support member countries during emergencies, indicating a concerted effort to bolster economic resilience [fa9212c7].
Analysts suggest that BRICS is unlikely to create a new currency, given the complexities involved and the dominance of the US dollar in global finance. The potential for increased tariffs could lead to significant economic repercussions for the US, including inflation and supply chain disruptions [fa9212c7].
In summary, Trump's tariff threats pose significant challenges for BRICS nations, particularly India and Nigeria, as they navigate the complexities of international trade and currency reliance. The unfolding situation will likely shape the future of BRICS and its role in the global economy [fa9212c7].