US President-elect Donald Trump has threatened to impose 100 percent tariffs on the nine-nation bloc if he wants to create a rival currency to the US dollar.
“The idea that the BRICS countries are trying to move away from the dollar while we stand by and watch,” Trump wrote on social media on Saturday.
Major world powers China and Russia are part of the BRICS alliance, along with Brazil, India, South Africa, Iran, Egypt, Ethiopia and the United Arab Emirates.
During the US election, Trump campaigned on imposing large-scale tariffs. It has increased threats of tougher levies in recent days.
The latest message from Trump, who will take office on January 20 next year, was aimed at BRICS, a bloc of mostly emerging economies.
Leading politicians in Brazil and Russia have suggested creating one. BRICS currency to reduce US dollar dominance in global trade. But internal dissension has slowed any progress.
“We need a commitment from these countries that they will neither create a new BRICS currency nor return another currency to replace the mighty US dollar or face 100 percent tariffs and should be expected to say goodbye to selling into the wonderful American economy.” Trump wrote on his social media platform Truth Social.
“They can find another sucker,” he said.
But some Trump allies have suggested that his recent announcements are negotiating ploys, meant more as an opening bid than a promise.
Asked about the president’s proposed use of tariffs, Republican Senator Ted Cruz responded by noting the “importance of leverage.”
“You see the threat of tariffs against Mexico and Canada, there’s immediate action,” the Texan said Sunday on CBS News’ “Face the Nation.”
Canadian Prime Minister on Friday Justin Trudeau made an unscheduled visit. to Trump’s Florida state of Mar-a-Lago, ostensibly to fend off a potential 25% tariff on Canadian goods heading south.
Trump’s pick for Treasury secretary, Scott Besant, previously suggested that the president’s pick’s threats of major tariff hikes were part of his negotiating strategy.
“My general view is that at the end of the day, he’s an independent businessman,” Besant said of Trump in an interview with the Financial Times before he was nominated for the role.
“It grows from de scalete.”
A tariff is a domestic tax applied to goods when they enter a country, proportional to the import price. So a car valued at $50,000 and imported into the US with a 25 percent tariff would face a $12,500 charge.
Tariffs are a central part of Trump’s economic vision — he sees them as a way to grow the U.S. economy, protect jobs and raise tax revenue.
He has previously claimed that these taxes “will not be a cost to you, it is a cost to another country”.
It is almost universally regarded by economists as misleading.
The charge is physically paid by the domestic company that imports the goods, not the foreign company that exports them.
So, in that sense, it’s a straightforward tax paid by domestic US firms to the US government.
Trump imposed a number of tariffs during his first term in office, most of which were retained by his successor, President Joe Biden. Economic studies show that most of the economic burden was ultimately borne by American consumers.