President-elect Donald Trump threatened the BRIC group of emerging-market nations with 100% tariffs if they attempt to challenge or replace the U.S. dollar as the primary global reserve currency. The BRIC alliance, originally comprising Brazil, Russia, India, and China, now includes five other countries. Trump stated that any attempts to create a new currency or back another to replace the U.S. dollar would result in severe tariffs and potential exclusion from the U.S. economy. The BRIC group collectively represents 45% of the world’s population.
At a summit in October, Russian President Putin accused the U.S. of weaponizing the dollar, which was seen as a response to Trump’s comments. Trump has proposed tariffs on imported goods as a way to boost the U.S. economy, with plans for 10% to 20% tariffs on all $3 trillion worth of imported products and higher rates for products from China. However, experts warn that such tariffs could increase inflation and lower growth in the U.S., with studies showing the cost falling on domestic consumers.
Trump has also threatened tariffs against Mexico, Canada, and China if they do not cooperate on issues such as the fentanyl drug epidemic and illegal immigration. Despite talks between Trump and Mexican President Sheinbaum and Canadian Prime Minister Trudeau, there are no guarantees that the tariffs will be avoided. Overall, Trump’s use of tariffs as an economic strategy has raised concerns both domestically and among U.S. trading partners.
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