President-elect Donald Trump has warned Brics nations that he expects guarantees they will not seek to create a new currency as an alternative to the US dollar. He reiterated his threats of instituting a 100% tariff.

“The idea that Brics countries are trying to disengage from the dollar while we do nothing is over,” Trump stated in a post on his Truth Social platform on Saturday.

Read: Brics+ countries are determined to trade in their own currencies

“We insist on a commitment from these nations that they will not create a new Brics currency or support any currency that could replace the strong US Dollar. Non-compliance will result in 100% tariffs, and they can say goodbye to accessing the prosperous US economy,” he added.

During his campaign, Trump pledged to impose substantial costs on countries attempting to abandon the US dollar.

His tariff threats have gained renewed importance as the president-elect prepares to take office in January.

Trump and his economic team have been investigating methods to penalize both allies and adversaries that engage in trade using currencies other than the dollar. Possible actions could involve export controls, accusations of currency manipulation, and trade levies, according to insiders familiar with the talks.

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Trump has consistently emphasized his goal for the US dollar to remain the world’s primary reserve currency, stating in a March interview with CNBC that he “would not allow countries to turn away from the dollar” since it would be “harmful to our nation.”

The Brics nations, which include Brazil, Russia, India, China, and South Africa, discussed the concept of de-dollarization at a summit held in Johannesburg in 2023.

Resistance to the dollar’s dominance gained traction in 2022 when the US spearheaded economic sanctions against Russia.

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Trump’s economic advisors highlighted the necessity to address the Brics movement.

Listen/read: Real estate investing in Africa and the transition from the mighty dollar

“There is absolutely no chance that Brics will replace the US dollar in international trade, and any country that tries to do so should bid farewell to America,” Trump asserted on Saturday.

In the lead-up to his second term, the president-elect has already disturbed global markets with threats to impose an additional 10% tariff on goods from China, and 25% tariffs on all products from Mexico and Canada if those nations do not take greater action to limit the flow of illegal drugs and undocumented immigrants into the US.

Canadian Prime Minister Justin Trudeau met with Trump on Friday to discuss trade and border issues in an effort to alleviate tensions between the two allied countries following the tariff warning.

© 2024 Bloomberg

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