Newly elected US Pesident Donald Trump. (Photo by Chip Somodevilla/Getty Images)
Donald Trump has set his sights on the Brics coalition. The US president-elect declared on Truth Social that Brics nations would face 100% tariffs if they dared to pursue a unified currency or back alternatives to the US dollar.
“The idea that Brics countries are trying to move away from the Dollar while we stand by and watch is OVER,” Trump proclaimed.
He called for an unequivocal commitment to the dollar’s supremacy, warning that defiance could mean a swift exit from the lucrative US market. Brics, initially comprising Brazil, Russia, India, China and South Africa, expanded this year to include Iran, the United Arab Emirates, Ethiopia and Egypt. With more than 30 additional countries expressing interest, the bloc is drawing global attention.
In 2023, Brazil’s President Luiz Inácio Lula da Silva floated the idea of a South American common currency to lessen dependence on the dollar.
Although the Brics currency concept sounds bold, its reality is complicated. Economic disparities and political rivalries in the bloc make a unified currency unlikely anytime soon. Yet, the group’s ability to use their currencies and banking systems to sidestep Western sanctions, especially for nations such as Russia and Iran, poses a potential challenge to dollar hegemony. Whether Trump’s fiery rhetoric translates into tangible action or is merely bluster remains to be seen.
Trump has once again taken his signature approach to international relations — the art of the economic ultimatum.
Trump’s ultimatum to the Brics nations came just days after pledging steep tariff increases on imports from Mexico, Canada and China. His reasoning? A self-proclaimed crusade against illegal immigration, crime and the relentless flow of drugs across US borders.
“We’re not going to stand by while our borders are overrun and our economy undermined,” Trump asserted, setting the stage for a policy that would undoubtedly rattle global supply chains and provoke economic tensions with key trading partners.
Critics were quick to point out the potential fallout. Such tariff hikes could escalate prices for American consumers, disrupt trade agreements and strain relations with allies who have long been essential to the US economy. Yet Trump seems unfazed, relying on his populist mantra that tough rhetoric and aggressive measures are what’s needed to protect American sovereignty.
Whether this is a calculated strategy or political bluster, Trump’s latest pledge underscores his consistent reliance on economic brinkmanship. For better or worse, his approach remains rooted in the belief that America’s strength lies in its ability to leverage power — sometimes, through a heavy dose of economic shock therapy.
Trump’s tariff proposal follows the familiar refrain of “America First” but the implications are far more nuanced. The National Retail Federation recently laid bare the potential fallout: a loss of $78 billion in annual purchasing power for American consumers.
That’s not a trivial figure — it’s a seismic shift in the financial landscape of everyday households.The effect would ripple through the essentials of daily life. Clothes, toys, appliances, footwear and even the trusty suitcase for that long-overdue vacation — all would see price hikes.
Tariffs are not economic fortresses; they are shifting burdens. While initially paid by importers, these costs seldom stay confined. They trickle down, showing up as higher prices on shelves.
Trump’s assertion that the financial weight falls on foreign exporters oversimplifies a labyrinthine reality. Some manufacturers might lower their prices to remain competitive, while others could relocate production to sidestep tariffs. Importers, the intermediaries in this chain, often pass along added costs to consumers.
Tariffs do indeed send a message — one of defiance or recalibration — but they are a blunt instrument. They resonate with the populist call for fairness but at what price? For all the swagger of this economic gambit, the brunt of its consequences might rest squarely on the American public, transforming a bold political manoeuvre into a costly exercise in consumer sacrifice.
Trump’s fixation on tariffs reflects a dated and myopic economic vision. While the rhetoric of tariffs as a panacea for job creation and investment plays well politically, it sidesteps their broader consequences. Experts highlight the risk of retaliation, which could harm industries far removed from those Trump vows to protect, leaving American workers more vulnerable than ever.
The president elect’s tariff policies are less about economic strategy and more about political theatre — a crude instrument wielded to vilify China, Russia, and other Brics partners, and obscure deeper structural issues at home.
The decline of US manufacturing is not solely the result of foreign competition; it is a symptom of decades-long neglect to modernise the workforce and adapt to global shifts. Blaming external forces might score campaign points but it offers little by way of real solutions. Without bold policies addressing domestic shortcomings, tariffs remain a costly distraction from the genuine work of economic renewal.
Far from being a coherent policy tool, Trump’s tariffs serve as a blunt instrument for dramatising grievances against China, deflecting attention from systemic issues closer to home.
Without a comprehensive, forward-looking economic agenda, these tariffs risk becoming a costly distraction rather than a catalyst for renewal. The fixation on punitive measures draws attention away from what’s truly needed — forward-thinking strategies that strengthen America’s own economic foundations.
Clinging to reactionary tactics risks eroding the very edge the US seeks to protect. To remain a global leader, Washington must pivot from these short-sighted moves toward innovative, long-term approaches.
Dr Imran Khalid is a freelance columnist on international affairs based in Karachi, Pakistan.