US President Donald Trump recently imposed rates from 10% to 50% on Brics countries (Brazil, Russia, India, China, South Africa and new members Egypt, Ethiopia, Iran, Saudi Arabia, United Arab Emirates, Indonesia). The Brics countries took the step in response to the initiative to dollar the dollar and challenge the global credibility of the US dollar. But Trump’s move could lead to the US dollar facing Brics. Now Brics is moving to trade in their currency to bypass the country dollars. The highest rate Trump on India and Brazil imposed 50-50% rates on India and Brazil in Brics countries. Trump frustrated this step by India which continues to buy oil from Russia. Trump also gave a message that if Brics do business in their currency instead of dollars, it will be difficult for him to do so. Putin said Russian President Vladimir Putin first suggested to trade his currency instead of dollars. This has caused America to feel threatened at its dollar. The Furious Trump has warned the Brics countries several times that if these countries take a step that threatens the dollar, it will tax all the countries so much that it will be difficult for them to do business. Brics has not made any decision on his currency yet, but Trump has begun to drop tariff bombs on all countries. This has led to a new tariff war in the world. Why does Trump fear this move from Brics? Trump is of the opinion that Brics is formed to damage US interests and reduce dollar global dominance. Let us tell you that the US dollar has been the backbone of global trade, oil purchases and international transactions for decades. About 80% of the world’s trade is in dollars and it gives the US the power to take loans at low interest, economic stability and control over world markets. Brics is working to reduce their dependence on the country, especially Russia and China. But now after Trump’s high tariff, India may also be involved in this initiative. It’s a shock to America. Brics challenge the dollar. After Trump’s move, India, Russia, China, Brazil and South Africa were united. The heads of these countries can unite at the SCO conference to be held in China at the end of August. During this time, they may also find solutions to handle the US tariff bomb. Before attending the SCO summit in China, there was a significant conversation between Premier Modi and Putin, Premier Modi and Brazil President Lula da Silva. There was also talk between Putin-Jinping and Lulaputin. Ramfosa also died with several heads of state. As such, Brics now prepares to challenge the dollar. There will be a big shock to the US. If Brics countries start trading in their currency, it will be an important setback for America. Russia first proposed a new international reserved currency in 2022 and Brics countries are moving to the promotion of trade in their national currencies (eg Rupee, Yuan, Ruble). Brics currencies can reduce the demand for dollars from the trade, which will be a major setback for the US economy. What is Trump’s tariff policy? Trump has warned the Brics countries that if Brics countries create a new shared currency or challenge the dollar, it will be imposed 100% tariff. This policy is part of US ‘US first’ policy, which aims to promote US industries and reduce trade deficit. However, this step can damage global trade and become a challenge for countries such as India, whose exports (pharmaceutical products, IT, textiles) can be affected. India’s status and diplomatic challenge is a founding member of India Brics as well as an important US business partner. But recently, Trump has imposed 50 percent tariff on India. Trump’s tariff policy could damage Indian exporters as it will increase the cost of products and be illegal in the US market. India has taken a cautious attitude towards De-dollars. Foreign Minister S. Jaishankar and the Governor of the Reserve Bank, Shaktikanta Das, made it clear that India is not aimed at weakening the dollar. India has a challenge to maintain diplomatic balance between the US, China and Russia.
Trump’s tariff decision was aggressively streaked and tried to remove dollars from the global currency
