President Trump has just threatened to impose 100% tariffs on BRICS members due to their proposal to undermine the international supremacy of the dollar. This could be the first major mistake in the Republican administration\u2019s new foreign policy. Without any real justification, Trump\u2019s attack on BRICS seems like an admission of weakness in the face of the multipolar bloc.<\/p>\n\n\n\n
For Washington, the dollar\u2019s hegemony has been the most effective soft power tool since the Cold War. The powers of the Federal Reserve and the Treasury Department, which can virtually set global prices, rely on international support for the dollar.<\/p>\n\n\n\n
However, the BRICS group, despite discarding the idea of creating a common currency, has mechanisms to trade in local currencies to reduce costs, promoting the de-dollarization of international trade. Additionally, through its New Development Bank<\/a>, BRICS nations propose an alternative to the Bretton Woods system for international loans and aid to Global South countries, aiming to compete with entities such as the International Monetary Fund.<\/p>\n\n\n\n This potential de-dollarization of international trade threatens U.S. power, which is reflected in the complete or de facto dollarization of three Latin American economies: Ecuador, El Salvador, and Panama. Furthermore, without dollar hegemony, sanctions would become ineffective, as their enforcement depends on the inability of a company, state, or individual to use U.S. dollars, effectively excluding them from the global economy. Thus, BRICS-led de-dollarization weakens the United States’s coercive power.<\/p>\n\n\n\n In this context, President Trump argues that tariffs are an effective deterrent\u2014or threat\u2014in his bilateral relations with other nations. However, imposing tariffs on the ten BRICS member countries could have serious repercussions for the United States. The U.S. economy, already vulnerable to the mere idea of tariffs in North America<\/a>, would struggle without smooth trade relations with the major economic engines of the Global South. Additionally, BRICS retaliation would cause turmoil in sectors such as fossil fuels and agricultural commodities.<\/p>\n\n\n\n In his recent statements, Lula, who currently holds the BRICS presidency, has rejected the White House\u2019s demands. The Brazilian president assured that there will be reciprocal tariffs on the United States<\/a> if Trump confirms the measure.<\/p>\n\n\n\nTariff Threats<\/strong><\/h3>\n\n\n\n