BRICS Wants to Replace the Dollar’: Trump Defends Tariffs as Shield for US Economic Power

BRICS Wants to Replace the Dollar’: Trump Defends Tariffs as Shield for US Economic Power

By Sandip Singh Rajput | Source Reference: Reuters, BBC News, Al Jazeera, United Nations Reports, Jio News (Published on [Amezing News And Free Tools Kit]  https://www.amezingtoolkit.in/

This image is originally a human photograph, edited using Google Gemini AI for background and color enhancement. The original human subject remains unchanged. All edits comply with Google Content and Copyright Guidelines. Image Credited By Google Gemini AI.

In recent remarks that have stirred debates across the global economic and political spectrum, former U.S. President Donald Trump renewed his warnings against BRICS nations considering moves to replace the U.S. dollar in cross-border trade. Trump argued that such steps would directly challenge American economic dominance, and that tariffs serve as a necessary defense. But behind this bold rhetoric lies a tangle of strategic interests, economic vulnerabilities, and shifting global alliances.

In this article, we explore:

• Why BRICS is considering alternatives to the dollar

• Trump’s logic and tariff threats

• The risks and costs (for both sides)

• How BRICS members are responding

• What this means for India, and for your readers

The BRICS Proposition: De-Dollarisation in Motion

What is BRICS aiming for?

The BRICS grouping (Brazil, Russia, India, China, South Africa, plus several newer entrants) has long pondered reducing reliance on the U.S. dollar for trade and reserves. This is often called de-dollarization. Rather than settle every cross-border transaction in USD, the idea is to use local currencies, or even a new regional common currency, or at least alternative payment systems. Such a shift would reduce exposure to U.S. sanctions, exchange rate volatility, and the dominance of U.S. monetary policy.

Projects such as BRICS Pay (a payments messaging system among member countries) are concrete steps toward building alternatives to dollar-centered networks.

However, it is important to stress: so far, no BRICS plan has fully replaced the dollar in global finance. Many members retain strong dependence on the dollar for trade, reserves, and capital flows.

Why now?

Several recent trends reinforce the de-dollar push:

1. Sanctions and financial weaponization: In recent years, the U.S. and its allies have imposed sanctions on Russia (and others), freezing dollar-denominated assets and excluding entities from SWIFT. This shows how the dollar can be used as a geopolitical tool — a vulnerability for nations that depend heavily on it.

2. Geopolitical shifts: As China’s influence grows, and emerging markets gain heft, there is more appetite for financial systems less dominated by the West.

3. Diversification: Many central banks globally have already started to diversify away from pure USD holdings, adding euros, gold, or special drawing rights (SDRs).

4. Technology & payment systems: Alternatives like BRICS Pay, or digital currencies, make it technically more feasible to bypass the dollar network.

So the underlying momentum is there — but the question is whether it is enough to challenge the U.S. dollar’s primacy.

Trump’s Response: Tariffs as Economic Shield

Donald Trump has strongly pushed back against any move to dethrone the dollar. His argument is straightforward (from his perspective): The U.S. dollar’s dominance gives America unique privileges — low borrowing costs, global influence, and leverage in sanctions. If that is challenged, the U.S. must assert itself.

Key warnings and threats

• In January 2025, Trump publicly warned that BRICS nations must commit to not creating a new BRICS currency, or they would face 100% tariffs on their goods entering the U.S.

• More recently, Trump called BRICS an “attack” on the U.S. dollar and claimed he threatened trading partners that if they joined the BRICS currency push, he’d impose tariffs.

• He further declared that “anybody who wants to deal in dollars will have an advantage”—implying that countries abandoning dollar transactions would suffer relative isolation.

• Trump’s posture frames tariffs not just as trade instruments, but as geopolitical punishment: countries challenging U.S. monetary order must pay a cost.

Essentially, Trump defends tariffs as a shield — a mechanism to deter challengers to U.S. economic power.

The logic, and its limits

Trump’s logic can be summarized:

1. Dollar dominance = U.S. global leverage (in sanctions, capital flows, interest rate power).

2. If rivals reduce dollar reliance, America loses influence.

3. Hence, impose tariffs to raise the cost for any country that challenges the dollar.

But this logic has two main vulnerabilities:

• Retaliation and economic pain: Tariffs provoke countermeasures. Nations under U.S. tariff pressure may retaliate, harming U.S. exporters and domestic industries.

• Long-term structural shift: Even with tariffs, countries may gradually shift away from the dollar if the incentive is strong — particularly if U.S. behavior is perceived as aggressive or unpredictable.

Studies show that a 100% tariff on BRICS imports could lead to lower GDP growth and higher inflation in the U.S. as well. For example, a PIIE (Peterson Institute) analysis suggests that heavy tariffs would cause substantial economic drag. PIIE

Moreover, retaliatory acts from BRICS countries (reciprocal tariffs, supply chain shifts, currency hedging) could further harm U.S. interests. AAF

Thus, while tariffs are a strong deterrent weapon, they carry significant risk.

Risks, Costs & Trade-offs

For the U.S.

• Domestic inflation and consumer costs: Tariffs on imports raise input costs for U.S. firms, which often pass them to consumers.

• Reduced export markets: Many U.S. goods may lose competitiveness abroad due to retaliatory tariffs or loss of dollar trade partners.

• Financial instability: If nations reduce dollar holdings or shift reserves, U.S. interest rates might rise, and the U.S. may lose favorable borrowing conditions.

• Diplomatic backlash: Aggressive economic policies could alienate allies and weaken U.S. soft power.

For BRICS and other nations

• Trade disruptions: Reliance on dollar trade means some exposure to U.S. retaliation.

• Transition costs: Building alternative payment systems, developing local currency credit networks, and convincing markets to accept new currencies is expensive.

• Coordination challenges: BRICS countries have divergent interests, economic systems, and levels of openness — making monetary integration or common currency efforts complex.

• Market confidence: Investors may fear volatility, currency risk, or capital flight during transitions away from dollar dominance.

BRICS Responses: Between Signal and Reality

The BRICS nations have reacted with caution, signaling intent but often resisting full-scale disruption.

• The Kremlin (Russia) dismissed claims that BRICS plans a new common currency, saying the group focuses more on joint investment platforms than replacing the dollar.

• Many BRICS members emphasize diversification over outright dollar abandonment—using bilateral currency swaps, local currency trade, and strengthening regional payment networks.

• India has publicly stated it is not pursuing a path to weaken the dollar, recognizing that the U.S. remains a major trade partner. India sees value in stability and continuity in global economic systems.

• Internal debates: Some members prefer incremental moves; others (with more exposure to sanctions) push harder. This divergence sometimes slows unified action.

So far, BRICS has proceeded cautiously — planting seeds for future currency/de-dollarization options rather than razing existing dollar networks.

Implications for India & for Your Readers

For India, the situation is delicate.

• India is a key BRICS member, but it also depends heavily on the U.S. economy, foreign investment, and global financial stability.

• Pursuing an anti-dollar agenda aggressively could jeopardize foreign capital, imports, or investor confidence.

• On the other hand, India may selectively benefit from diversification — via infrastructure funding, trade deals with non-dollar countries, and regional payments systems — but without fully abandoning the dollar.

For your readers, the big picture is:

• This is not just geopolitics — it touches currency reserves, trade routes, fuel prices, inflation, and investment flows.

• Even small shifts in global currency alignment can have big ripple effects in emerging economies.

• Watching how India positions itself — balancing U.S. ties and BRICS ambitions — will matter for news, for investment, and for understanding future global order.

Scenario Outlook: Who Stands to Gain?

Let’s consider possible scenarios:

1. U.S. prevails (tariff deterrent works)
   BRICS back off on aggressive de-dollarization. The dollar remains unchallenged. U.S. maintains its leverage, but at the cost of strained trade relations.

2. Gradual shift (incremental moves)
   Dollar remains dominant globally, but bilateral and regional dollar alternatives grow. Over time, the dollar’s share of reserves and trade erodes gradually.

3. Breakthrough (regional currency emerges)
   A BRICS or regional currency gains traction in trade among members. If confidence and scale develop, it could challenge the dollar in specific corridors (though displacing it globally is still unlikely in the short term).

In any case, the next decade will be crucial. The path chosen will depend heavily on trust, coordination, economic stability, and geopolitical tensions.

---

The End

Trump’s defense of tariffs as a shield for U.S. economic power reflects deeper anxieties about losing structural advantages. The dollar isn’t just a currency — it is a linchpin of American influence in finance, sanctions, and global trade.

BRICS’s move toward de-dollarization is a strategic experiment, built on shifting alliances, emerging technologies, and experiences with economic coercion. The question is not whether this idea is being floated — clearly it is — but whether it can become viable in practice without triggering intolerable backlash.

For Amezing News And Free Tools Kit readers, the key is to watch how Indian policy, trade alliances, currency flows, and global payments systems evolve. Every change in currency balance can ripple into your growth, inflation, investments, and even everyday costs.

Sources:

1. Reuters, “Trump repeats tariffs threat to dissuade BRICS nations from replacing US dollar"

2. Economic Times, “Trump calls BRICS ‘attack’ on US dollar”

3. Hindustan Times, “Trump says BRICS was attack on US dollar” 

4. American Action Forum, “Breaking Down the BRICS Tariff”

5. PIIE analysis, “100 % tariff on BRICS would cause lower GDP”

6. Studies on BRICS de-dollarization and geopolitical financial networks

Author Bio:

Sandip Singh Rajput is the founder and editor of AmezingToolkit.in, an independent digital platform for analytical news and educational tools. His work focuses on truthful reporting, digital transparency, and AI-driven fact-checking initiatives.