Incoming President Donald Trump on Saturday issued a direct threat to impose 100% tariffs on a bloc of nine nations if they attempt to undermine the value of the U.S. dollar.

His warning targeted the BRICS alliance member countries—Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates. Additionally, Turkey, Azerbaijan, and Malaysia have applied to join this group, while other nations have expressed interest in becoming members.

Although the U.S. dollar remains the world’s most widely used currency for international trade, accounting for approximately 58% of global foreign exchange reserves, according to the IMF, some alliance members and other developing economies have voiced dissatisfaction with the U.S.’s financial dominance.

The hegemony of the dollar faces challenges from the BRICS countries’ economic growth and their push to trade in currencies other than the dollar—a process often referred to as de-dollarization.

The Consequences of Trump’s Threat

In a post on Truth Social, Trump stated:

“We demand a commitment from these countries that they will not create a new BRICS currency or back any other currency to replace the mighty U.S. dollar, or face 100% tariffs. They will have to say goodbye to selling in the wonderful U.S. economy.”

At a recent BRICS summit, Russian President Vladimir Putin criticized the United States for “militarizing the dollar,” calling it a “big mistake.” Putin added:

“It is not we who refuse to use the dollar. But if they don’t let us work, what can we do? We are forced to look for alternatives.”

Putin emphasized that Russia has been promoting the development of an alternative payment system to circumvent Western sanctions and sustain trade with its partners.

Trump reiterated his stance, declaring that there is “no option” for the BRICS countries to replace the U.S. dollar in global trade. He warned that any nation attempting such a move should be prepared to “kiss the U.S. goodbye.”

Is the Dollar’s Dominance Really in Jeopardy?

Studies suggest that the U.S. dollar is not under immediate threat as the world’s reserve currency. According to an Atlantic Council model, the dollar remains “secure in the short to medium term” and continues to outperform competing currencies.

However, the growing economic influence of BRICS nations and their efforts to diversify trade outside the dollar could pose long-term challenges. This evolving situation highlights the need for careful monitoring and strategic response from U.S. policymakers.

A History of Trade Tensions

Trump’s latest threat is consistent with his history of leveraging tariffs to influence international policy. Previously, he had warned of 25% tariffs on all imports from Mexico and Canada, along with 10% tariffs on goods from China. According to Trump, these measures aim to curtail illegal immigration and drug trafficking into the United States.

After a conversation with Mexican President Claudia Sheinbaum, Trump expressed optimism that a trade war with Mexico would be avoided. Canadian Prime Minister Justin Trudeau, after meeting with Trump, returned to his country without receiving guarantees that Canada would be exempt from tariff threats.