On Thursday, President Donald Trump reiterated his threat to impose 100 percent tariffs on members of the BRICS economic bloc if they attempt to replace the US dollar as a reserve currency.
“The idea that the BRICS Countries are trying to move away from the Dollar, while we stand by and watch, is OVER,” Trump said in a statement on Truth Social. “We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy.”
Brazil, Russia, India, China, and South Africa were the founding members of the BRICS, but the group has since extended to include Egypt, Ethiopia, Iran, and the United Arab Emirates. Indonesia became a member earlier this month.
On Friday, Kremlin spokesman Dmitry Peskov stated that the BRICS members were not discussing the establishment of a currency, but rather the creation of collaborative investment platforms.
“The point is that BRICS is not talking about creating a common currency, nor has it ever done so,” Peskov said. “BRICS is talking about creating new joint investment platforms that would allow joint investments in third countries, mutual investments and so on.”
Speaking to Russia's TASS news agency in September 2024, Andrey Mikhailishin, head of the BRICS Business Council's task group on financial services, highlighted various projects aimed at developing a new financial system.
These included setting up a unit of account (Unit), a platform for international settlements in BRICS digital currencies (Bridge), a payment system (Pay), a settlement depository (Clear), an insurance system (Insurance), and a BRICS rating alliance.
According to Mikhailishin, a unit of account might be pegged to both gold and a basket of the BRICS members' national currencies.
"When you have a unit of account that can be converted into any national currency, it is more convenient for you to hold it, since it is a more liquid instrument," Mikhailishin remarked.
When the BRICS leaders convened in Kazan, Russia in October 2024, they agreed to restructure the global financial system and abolish the US dollar's supremacy.
Among them was Brazilian President Luiz Inacio Lula da Silva, who advocated for the establishment of a unified cross-border payments system that would allow BRICS countries to trade with one another while bypassing the dollar-dominated global financial system.
Lula stated that the group's New Development Bank (NDB), a multilateral development bank founded by BRICS, was intended to replace failing Bretton Woods institutions such as the International Monetary Fund (IMF).
The Brazilian leader stated that the NDB already has a portfolio of roughly 100 projects worth approximately $33 billion.
“It was designed to succeed where the Bretton Woods institutions continue to fail,” Lula said. “Rather than offering programmes that impose conditionalities, the NDB finances projects aligned with national priorities.”
Lula added that “now is the time to move forward with creating alternative payment methods for transactions between our countries.”
While there have been indications that the BRICS could establish a reserve currency, officials appeared to back away from this ambition when they met in October 2024, according to Michael Wan, a senior currency analyst at MUFG Research.
“While BRICS has at times talked about creating a new unified BRICS currency, the latest summit in Kazan in October did not put an emphasis on creating a new currency,” Wan stated in a Dec. 2 note. “It’s unclear how 100 percent tariffs on a group of countries that make up 37 percent of global GDP would happen in practice, but serves as a possible preview of tariff diplomacy under Trump 2.0.”
Indian Prime Minister Narendra Modi has stated that he would welcome measures toward BRICS financial integration, while Chinese communist regime leader Xi Jinping has urged member countries to strengthen financial and economic cooperation.
“They can go find another sucker Nation. There is no chance that BRICS will replace the U.S. Dollar in International Trade, or anywhere else, and any Country that tries should say hello to Tariffs, and goodbye to America!” Trump wrote in his latest social media post on the subject.
This is not the first time Trump has threatened BRICS countries with economic implications. His most recent warning is nearly identical to one he made in November 2024, following the BRICS conference in October 2024 and only weeks after winning the 2024 presidential election.
At the time, Russia warned that any US move to coerce countries to use the currency would backfire.
“More and more countries are switching to the use of national currencies in their trade and foreign economic activities,” a Kremlin spokesperson told reporters in December 2024. “If the U.S. uses force, as they say economic force, to compel countries to use the dollar it will further strengthen the trend of switching to national currencies (in international trade).”
Despite fears about potential de-dollarization, the US dollar continues to serve as the world's primary reserve currency, with that dominance further increasing recently, in part due to a robust US economy, tighter monetary policy, and heightened geopolitical dangers.
According to a study conducted by the Atlantic Council's GeoEconomics Center in 2024, the US dollar remains the world's primary reserve currency, with neither the euro nor the BRICS states successfully reducing worldwide reliance on the dollar.
