Trump is not right this time. He is a pragmatic leader and that’s why so popular but this time around, he may be getting things wrong.
Over the weekend, Trump issued a threat for BRICS. He vowed to impose 100% tariffs on nations like Russia, India and China just for exercising a basic right: The choice to choose currency. These nations are not American slaves and they have a right to trade in whatever currency they want. As simple as that!
Trump said, “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. They can go find another “sucker!”
He added, “There is no chance that the BRICS will replace the US Dollar in International Trade, and any Country that tries should wave goodbye to America.”
Trump is ill-informed here. These nations, especially Russia, didn’t choose to ditch dollar. In fact, it was the US which imposed sanctions on Moscow and barred them from using the dollar. Mr president, it was the US who forced these nations to look the other way. Even Putin himself said that his nation was in favour of the BRICS currency because the West was weaponising the dollar. He accepted that USD was the strongest instrument of trade in the world but sanctions undermined the global trust in it.
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Dear Trump, these threats won’t work anymore. BRICS is not Europe. Its economic muscles are strong. It’s respected worldwide. By imposing mass sanctions on these Asian giants, you will end up looking like an ostracised fool.
Instead of issuing threats, you should ‘MAKE THE DOLLAR GREAT AGAIN’
Here are a few steps that you can take NOW.
- Get rid of secondary sanctions, this will end up isolating the US in the long run.
- You must return confiscated sovereign funds. Behave like a nation and not a robber. Give Russia back their 300 billion, for starters.
- You must open Swift to everyone without restrictions. Just remember, countries don’t care about your sanctions. They need business, even if it’s coming from Russia.
- Make the USD usable by everyone, get rid of sanctions that bar nations from using it. Otherwise, no one woukd want to use the dollar.
Again, all of your posturing and threats won’t change their minds.
For US to maintain its global hegemony, dollar supremacy is a fundamental need. The US economy benefits a lot from this.
This makes it easier for America to get loans. America issues its bonds every year and borrows currency from the people. This makes it easier for the US economy to continue growing. Japan has bought bonds worth about $1 trillion of America, while China has bought bonds worth about $750 billion.
Even today, the US currency still accounts for 59 percent of the foreign exchange reserves in the first quarter of this year.
BRICS wants to change this equation for obvious reasons.
The way the US has weaponised dollar in international economy and diplomatic spheres has weakened its reputation as a reliable tool for cross-border trade
That’s why BRICS nations have been taking steps to ensure financial stability.
Trump should stop thinking that BRICS is out on a mission to hurt American interests; instead, they just want to secure their own.
If Trump really intends to convince BRICS not to drift away from Dollar, he should take measures to boost the world’s confidence in American system and currency.
