Donald Trump, the 47th President of the United States, continues to issue high-profile statements on a daily basis following his inauguration. Another example of such a statement is the pledge to implement 100% import tariffs on the BRICS countries if they attempt to undermine the US dollar.
Trump stated on January 30 on Truth Social that the United States had previously tolerated the BRICS countries’ efforts to transition away from the currency in silence, but it would no longer do so.
The president of the United States explained his strategy for thwarting such efforts:
“We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful US Economy. They can go find another sucker Nation.”
He reiterated this threat: “… any Country that tries should say hello to Tariffs, and goodbye to America!.”
Trump concluded his post by asserting that the de-dollarization endeavors of America’s adversaries were destined to fail -“no chance that BRICS will replace the U.S. Dollar in International Trade, or anywhere else.”
This assertion is not particularly sensational. Trump has consistently issued threats against nations that challenge the US dollar’s dominance. He has also castigated the 46th President, Joe Biden, for failing to adequately address such threats.
For instance, in April 2023, Trump posted on Truth Social the following:
“China is attempting to deprive the U.S. dollar of its status as the primary currency of the globe. It will be the most significant defeat in the history of our nation if this occurs, and it is highly probable that it will under Biden.”
Trump’s Position on the Dollar and BRICS
Trump reiterated his dedication to maintaining the dollar as the global economy’s currency throughout his 2024 campaign. He committed to taking action against countries that were implementing de-dollarization policies:
On March 11, 2024, Trump stated to CNBC, “I despise it when nations abandon the currency.”
“I despise it when nations abandon the currency. I would not permit nations to forsake the dollar, as the loss of this standard would be equivalent to the loss of the Revolutionary War. It would be a devastating setback to our nation.”
In September 2024, during a campaign rally in Wisconsin, Trump acknowledged that numerous nations were “abandoning the dollar,” but he pledged to reestablish its status. If not, he pledged to retaliate against those who were accountable for switching from the dollar.
In addition to those who declined to use the dollar as a reserve currency, Trump also pursued individuals who were manipulating the dollar’s exchange rate. He emphasized that, during his tenure as the 45th president, he engaged in a battle against currency manipulators. Washington accused Beijing of artificially devaluing the yuan in order to increase its exports in 2019, designating Beijing as a “currency manipulator.”
The Currency Threat of the BRICS and Trump’s Advisors
A Bloomberg article titled “Trump Advisers Discuss Penalties for Nations That Move Away from the Dollar” was published in April 2024. The article observed that Trump’s campaign team was of the opinion that the United States should concentrate on the BRICS countries’ endeavors to establish a new currency, a topic that was addressed during their August 2023 summit.
Nevertheless, the threat of a 100% tariff by the United States is of no consequence to certain countries. Russia has already achieved virtually zero exports to the United States. This is also irrelevant for China, as Trump has already committed to a 60% tariff on Chinese imports; increasing it to 100% would not significantly alter the situation.
The Dollar: Trump vs. Biden
Trump criticized Biden for undermining the dollar throughout his campaign, not only through inaction but also through poor decisions. Biden’s April 2024 law, which granted him new authority to seize Russian dollar assets to support Ukraine’s reconstruction, serves as an example. Trump contended that this eroded the global confidence in the US currency.
The International Monetary Fund (IMF) monitors the dollar’s share in global foreign exchange reserves on a quarterly basis, which is a critical indicator of its strength.
The dollar’s proportion in global reserves was 59.0% at the conclusion of 2020, prior to Biden’s assumption of office.
By the end of 2024, this percentage had decreased to 57.4%, representing a 1.6 percentage point decrease during Biden’s tenure.
The IMF has not registered a lower level since 1995. The highest percentage was achieved in 2001, at 73%.
Nevertheless, the dollar’s share experienced a substantial decline during Trump’s inaugural presidency (2017–2021). It was 63.6% at the conclusion of 2016.
By the end of 2020, the dollar had declined by 4.6 percentage points, a more substantial decline than under Biden. Trump significantly weakened the dollar more than Biden did.
Trump’s Cryptocurrency Plan: A Threat to the Dollar?
There are already indications that the dollar’s decline may be accelerated by Trump’s second term. There is no de-dollarization plan from the BRICS that is comparable to Trump’s own proposals, which have the potential to undermine the US currency.
Trump has publicly conveyed his strong endorsement of private digital currencies, such as cryptocurrencies. He pledged to establish the United States as the “crypto capital of the world” during his campaign.
His proposals encompass the following:
- The establishment of a “national Bitcoin reserve” would include Bitcoin in the United States’ international reserves in addition to gold.
- The repayment of the US national debt through cryptocurrency is currently underway.
- The setting up of new power facilities to facilitate the expansion of crypto mining.
- Establishing a favorable tax structure for cryptocurrency companies.
- Creating a presidential advisory council on cryptocurrencies.
Several prominent crypto devotees, including Elon Musk, David Sacks, and Scott Bessent, are members of Trump’s inner circle.
The Federal Reserve versus Trump
Additionally, there are indications of an unprecedented conflict between the Federal Reserve and the Trump administration. The Federal Reserve’s century-long history has not witnessed such a level of tension. A conflict of this nature would only serve to exacerbate the dollar’s difficulties.
The Contradictory Rhetoric of Donald Trump
Trump has made many statements and promises that are in direct opposition to one another. Some statements are explicitly self-contradictory. His rhetoric can be characterized as a compilation of antinomies, which are statements that result in mutually exclusive conclusions.
Trump’s “monetary antinomies” underscore the severe divisions within America’s ruling circles. Each of these contradictions has the potential to be catastrophic for the dollar and the nation as a whole.