Trump Warns BRICS Nations Including India of 10% Tariff Over Dollar Challenge
| 2025-07-09
President Donald Trump, left, with Defense Secretary Pete Hegseth, right, during a cabinet meeting at the White House, Tuesday, July 8, 2025, in Washington. (AP)
Donald Trump has announced a 10% tariff on BRICS countries, claiming the bloc threatens the US dollar's status as the global standard currency.
"They have to pay 10% if they are in BRICS, because BRICS was set up to hurt us, to degenerate our dollar, to take it off as a standard," Mr Trump said. "That is okay if they want to play their game, but I can play their game too."
BRICS is a coalition of major emerging economies that originally included Brazil, Russia, India, China, and South Africa. In recent years, it has expanded to welcome Saudi Arabia, Egypt, the United Arab Emirates, Ethiopia, Indonesia, and Iran. The group has signalled ambitions to promote alternative payment systems and reduce dependence on the US dollar, particularly in trade among member states.
According to Mr Trump, these efforts pose a threat to American financial leadership. "If people want to challenge it, they can, but they're going to have to pay a big price, and I don't think any of them are willing to pay that price," he added.
He also argued that the dollar’s international status underpins US prosperity and warned that losing it would be comparable to a catastrophic military defeat. "If we lost the world standard dollar, that would be like losing a war, a major world war. We would not be the same country any longer," Mr Trump said. "The dollar is king. We're going to keep it that way."
Mr Trump claimed that the bloc had already begun to fragment. "I thought BRICS was, and I said it a year ago, that it largely broke up, but there are a couple of them hanging around," he asserted.
During the remarks, Mr Trump also criticised US President Joe Biden, contending that American monetary leadership requires what he called "a smart president." He said, "If you have a smart president, you will never lose the standard. If you have a stupid president like the last one, you would lose the standard."
The comments come days after the BRICS nations concluded their summit in Brazil, where leaders discussed strategies for closer economic cooperation and the possibility of reducing reliance on the dollar in trade settlements.
Analysts note that while the BRICS agenda to shift away from the dollar has gained political attention, the bloc’s members face significant differences over implementation and have diverse economic priorities.
Context
BRICS has grown in influence over the past decade, representing a large share of global population and output. The group has promoted the New Development Bank as a financing alternative to Western-led institutions such as the International Monetary Fund and the World Bank.
However, the US dollar remains the primary currency for international reserves and transactions. According to the International Monetary Fund, nearly 60% of global foreign exchange reserves are held in dollars.
Efforts by countries such as China and Russia to settle trade in other currencies have accelerated in recent years, partly in response to economic sanctions and geopolitical tensions with the United States.
While Mr Trump’s proposed tariffs are intended to deter further moves away from the dollar, it remains uncertain whether such measures would gain support in Congress or be enforceable under existing trade agreements.
Some economists argue that imposing blanket tariffs on a broad coalition of trading partners could carry domestic costs, potentially increasing prices for American consumers and provoking retaliatory measures.
In his remarks, Mr Trump did not specify a timeline for when the 10% tariff would take effect or what products it would cover, stating only that the policy could be implemented "pretty soon."
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