Russia and China could face economic chaos after Donald Trump threatened BRICS nations with 100% tariffs on US imports.
The nine-strong alliance led by Russia and China, including Brazil, India, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates, has expressed frustration with the dominance of the US dollar.
According to the IMF, nearly all commodities, including oil and crops, are traded using the US dollar, accounting for around 58% of all foreign exchange reserves.
The bloc is set to be joined by applicants Turkey, Azerbaijan, and Malaysia. It has said it wants to trade in non-dollar currencies to end what it claims is America’s stranglehold over the global banking system.
At the most recent BRICS summit in Kazan, Russian President Vladimir Putin said he planned to ‘de-dollarise’ the world economy, while other members said the ability to trade in other currencies would give all nations access to an independent and inclusive trading system.
But over the weekend, the incoming US president demanded that BRICS nations remain committed to the US dollar or face 100% tariffs on exports.
“The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER. We require a commitment from these Countries that they will neither create a new BRICS Currency nor back any other Currency to replace the mighty US Dollar, or they will face 100% Tariffs and should expect to say goodbye to selling into the wonderful U.S. Economy,” Trump posted on Truth Social on Saturday afternoon.
Trump has already threatened to impose 25 per cent tariffs on imports from Mexico and Canada and a further 10 per cent tax on goods from China.
Ex-UK chancellor Norman Lamont said that if BRICS countries did create a separate banking payments system, then international sanctions would be rendered useless.
Lord Lamont of Lerwick warned that a rival payments system would be a “major threat to the Western-led financial system” if it ever emerged.
He told the House of Lords: “While the idea of a BRICS payments system, which was announced by Mr Putin at the Kazan BRICS conference, may seem rather fanciful and a long way off, nevertheless it needs to be taken seriously.
“If it ever happened, it would be a major threat to the Western-led financial system, but above all it would make it impossible for the West to impose sanctions on countries like Russia, China or Iran or other malign countries.”
