BRIC nations on notice: Trump threatens 100% tariffs if they undermine US dollar

President-elect Donald Trump threatened 100% tariffs on a group of nine countries on Saturday if they undermined the US dollar.

His warning was aimed at countries in the so-called BRIC alliance, which includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the UAE.

Donald Trump during a meeting with the House GOP conference on November 13.

Allison Robbert/Pool via AP

Turkey, Azerbaijan, and Malaysia have requested for membership, while numerous additional nations have shown an interest in joining.

While the US dollar is by far the most widely used currency in the world and has withstood previous challenges to its supremacy, members of the alliance and other developing countries claim they are fed up with America's control over the international financial system.

According to the IMF, the dollar accounts for around 58% of global foreign currency reserves, and important commodities such as oil are still predominantly purchased and traded in dollars. The dollar's supremacy, however, is threatened by BRICS' expanding GDP share and the alliance's intention to trade in non-dollar currencies, a process known as de-dollarization.

Trump said in a post to Truth Social: "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 U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy."

At a BRIC conference in October, Russian President Vladimir Putin accused the United States of "weaponizing" the dollar, calling it a "big mistake."

"It's not us who refuse to use the dollar," Putin said at the time. "But if they won't let us work, what can we do? We're compelled to look for alternatives.

Russia has expressly advocated for the development of a new payment system that would provide an alternative to SWIFT, the global financial messaging network, and allow Moscow to avoid Western sanctions while trading with partners.

Trump said that there is "no chance" that BRIC countries would replace the US currency in global commerce, and that any country that attempts to do so "should wave goodbye to America."

Research shows that the U.S. dollar’s role as the primary global reserve currency is not threatened in the near future.

An Atlantic Council model that assesses the dollar’s place as the primary global reserve currency states the dollar is “secure in the near and medium term” and continues to dominate other currencies.

Trump's new tariff threat comes after he promised to impose 25% tariffs on all imports from Mexico and Canada, as well as an extra 10% tax on Chinese goods, in order to pressure the nations to do more to stem the flow of illegal immigrants and narcotics into the United States.

He has since spoken with Mexican President Claudia Sheinbaum, who voiced optimism Thursday that a trade war with the United States may be avoided. Canadian Prime Minister Justin Trudeau returned home Saturday after meeting with Trump, but there were no signs that the president-elect would back down from threatening penalties against Canada.