President-elect Donald Trump has reiterated his threats of imposing tariffs on certain foreign countries, specifically targeting a group of nine nations that he claims may jeopardize the dollar’s status as the world’s leading currency.

In a post on Saturday afternoon via Truth Social, Trump identified the BRIC alliance, which is made up of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates. He warned of implementing 100% tariffs and restricting their products from entering the U.S. market.

“It’s no longer acceptable for the BRICS nations to consider moving away from the dollar while we sit idly,” Trump remarked.

“We need a guarantee from these countries that they will not establish a new BRICS currency or support any alternative currency that could rival the powerful U.S. dollar. If they fail to comply, they will face 100% tariffs and may need to say goodbye to their access to the fabulous U.S. economy.”

What comprises the BRIC alliance?

BRICS refers to the countries Brazil, Russia, India, China, and South Africa, which initially formed this intergovernmental organization focused on promoting global investment strategies.

For instance, in 2012, the BRICS group contributed $75 billion to the International Monetary Fund to enhance its lending capabilities.

Recently, BRIC has grown to include additional nations. About thirty other countries, including Turkey, Azerbaijan, and Malaysia, have shown interest in joining the alliance, aiming to decrease their reliance on the U.S. dollar.

The Rise of the U.S. Dollar Post-World War II

Since surpassing the British pound in the aftermath of World War II, the U.S. dollar has maintained its position as the primary currency for international trade.

At the Bretton Woods International Monetary Conference in 1944, leaders from around the world convened to establish a trade and finance framework in the wake of the war. The consensus was to create a common currency, but with Britain’s economy in shambles due to the war, it was determined that the U.S. dollar would ultimately serve that purpose due to its strength.

According to the IMF, approximately 58% of the world’s foreign exchange reserves are held in U.S. dollars, and it has withstood numerous challenges. This dominance means that the dollar often acts as the preferred currency in transactions, even when conducted between foreign nations.

Challenges to the Dollar’s Dominance

Leadership within the BRIC alliance has voiced their frustrations over U.S. dominance.

In 2023, some BRIC nations began using the Chinese Yuan and the Russian ruble for trading purposes.

For instance, Brazilian President Luiz Inácio Lula da Silva has suggested creating a common currency for South America, akin to the Euro utilized in the European Union, to lessen reliance on the dollar.

Additionally, earlier this year, Russian President Vladimir Putin led a summit with 20 world leaders, encouraging them to reduce their dependency on the dollar.

The increasing economic influence of BRIC and its expressed intention to adopt other currencies—a phenomenon known as “de-dollarization”—hasn’t received much attention during the 2024 presidential campaign, yet it has piqued Trump’s concerns since his election win.

The president-elect stated on Saturday that there is “no possibility” that BRIC could replace the U.S. dollar in global trade, insisting that any nation attempting to do so “should bid farewell to America.”

Trump’s recent threat of tariffs, just weeks before he resumes office, fits into a broader strategy focusing on both U.S. adversaries and allies.

He’s also floated the idea of a 25% tariff on all imports from Mexico and Canada, along with an additional 10% duty on goods from China, aiming to compel these nations to take stronger measures against illegal immigration and drug trafficking into the U.S.