Trump risks alienating key partners, intensifying global economic tensions and accelerating efforts to bypass the dollar
Trump presidency is yet to begin but the president-elect has already spoken his mind on the US policy and it is not good news for the developing countries. US President-elect Donald Trump has issued a stern warning to the BRICS nations—Brazil, Russia, India, China, South Africa and their expanding coalition—which seek to challenge the dominance of the US dollar. Trump’s announcement of a potential 100 per cent tariff on these nations underscores the rising tensions across the globe as the BRICS bloc explores alternatives to the dollar. This move highlights the friction between the US and developing economies and could reshape global trade dynamics. It was widely expected that Trump would do everything possible to bail out the US out of debt and would not hesitate to take harsh measures against countries who are harming the US interests regardless of their friendship with the US. For decades, the US dollar has been the cornerstone of global commerce, widely used in trade and serving as the reserve currency for most nations. However, the BRICS coalition and other developing economies have expressed growing frustration over the disproportionate control that the US wields over the global financial system.
Nations within the BRICS bloc are already discussing plans for a new global currency or expanded use of their local currencies to reduce reliance on the dollar. There is no doubt that Trump’s threat of 100 per cent tariffs on BRICS nations reflects a protectionist stance and his determination to defend US economic interests. But that is Trump for you, he doesn’t mind taking tough decision even if the whole world is against him. Be it environment or trade or military expeditions Trump is capable of taking decisions which might be frowned upon the world over. He has categorically said that any attempt to undermine the dollar’s dominance would result in severe consequences, including exclusion from the US market. The big problem for developing nations is they depend upon the US market in a big way for their incomes and exporting revenue. Trump’s approach reveals his readiness to employ punitive measures against both allies and rivals in the global south, regardless of their historical ties with the US. The implications of such tariffs would be profound, potentially disrupting trade flows, exacerbating economic tensions and alienating key developing nations. A 100 per cent tariff would significantly raise the cost of exporting goods to the US, impacting industries that rely on American consumers. For economies like Brazil and South Africa, which are heavily reliant on exports, this could lead to economic slowdown. But ironically Trump’s threats may be counter-productive as many countries may further incentivise their search for alternatives to the dollar. Besides, Trump’s hardline stance may push developing countries closer together, fostering stronger ties within the BRICS bloc and beyond. Indeed raising tariff wall in today’s world is not a good idea but then Trump has mind of his own.
