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Trump Proposes 10% Tariff on BRICS Nations Over Dollar Concerns

A recent proposal to impose a blanket 10% tariff on imports from BRICS nations represents a significant potential shift in US economic policy, moving beyond targeted trade disputes to a broad-based confrontation with a growing economic bloc. This policy, presented as a defence of the US dollar’s global primacy, risks conflating a complex, long-term structural challenge like de-dollarisation with a tactical tool like tariffs, potentially creating more problems than it solves.

Key Takeaways

  • A proposed 10% tariff on BRICS countries is framed as a defensive measure against perceived efforts to undermine the US dollar.
  • The policy could prove inflationary for US consumers and invite retaliatory measures against American exports, disrupting established supply chains.
  • While intended to punish, such tariffs could paradoxically accelerate the de-dollarisation trend by incentivising BRICS members to create and utilise alternative trade and settlement systems.
  • The threat may function more as a negotiating tactic to secure bilateral agreements than a fixed policy, introducing significant uncertainty for markets.

The Anatomy of a Geoeconomic Threat

The suggestion of a sweeping tariff targets the expanded BRICS consortium, which now includes not only Brazil, Russia, India, China, and South Africa, but also new members like Egypt, Ethiopia, Iran, and the United Arab Emirates. The justification provided is that the bloc was explicitly “set up to hurt us” and to “degenerate our dollar” from its status as the world’s reserve currency (AP News, 2024). This perspective casts the economic alliance in a purely adversarial light, overlooking its members’ stated goals of fostering development and reforming global financial governance.

While concern over the dollar’s status is not new, threatening a tariff of this nature is a blunt instrument. The BRICS nations collectively represent a substantial portion of the global economy and population. A 10% levy would not be a surgical strike but a broadside against a diverse group of economies, from manufacturing powerhouses like China to commodity exporters like Brazil. The immediate effect would be an increase in the cost of goods for American importers, a cost almost certain to be passed on to consumers (PBS NewsHour, 2024).

De-dollarisation: An Accelerant or Illusion?

The central premise of the tariff threat is to counter de-dollarisation. However, the policy may well achieve the opposite. Forcing BRICS nations to pay a premium to access the US market would provide a powerful economic incentive to accelerate their development of non-dollar-based trade mechanisms. China has already been actively promoting the yuan in bilateral trade, particularly with Russia, and the BRICS’ New Development Bank (NDB) is exploring ways to increase lending in local currencies.

The dollar’s dominance is not mandated; it is a function of deep, liquid US capital markets, trust in US institutions, and powerful network effects. At present, the US dollar is still involved in nearly 90% of global foreign exchange transactions, according to the Bank for International Settlements’ 2022 survey. A trade war would not dismantle this structure overnight. Yet, it could chip away at the foundations of trust and create a clear rationale for other major economies to hedge their bets and systematically reduce their reliance on the dollar over the long term (Geopolitical Economy Report, 2024).

Navigating the Strategic Uncertainty

For investors and corporate strategists, this introduces a fresh layer of profound uncertainty. The direct impact on corporate margins is clear. US companies heavily reliant on imports from China, India, or Brazil would face compressed margins or be forced to raise prices. Sectors like consumer electronics, automotive parts, textiles, and pharmaceuticals would be particularly vulnerable. On the other side of the ledger, US exporters, especially in agriculture and advanced machinery, would face the near-certainty of retaliatory tariffs, jeopardising their access to some of the world’s largest consumer markets.

Currency markets would likely experience heightened volatility. An initial flight to safety could temporarily strengthen the dollar, yet the medium-term outlook would become clouded by the accelerating de-dollarisation narrative. Assets perceived as hedges against fiat currency debasement, such as gold, might find renewed interest. However, the situation is not straightforward; a global economic slowdown triggered by a trade war could also dampen demand for commodities.

Conclusion: A Test of Economic Statecraft

Ultimately, the proposed 10% tariff on BRICS nations is a high-risk gambit. It employs a traditional tool of trade protectionism to fight a modern battle over the future of global financial architecture. While it may be intended as a show of strength, it risks being perceived as a defensive reaction to an evolving global order, potentially encouraging the very behaviour it seeks to deter.

The most plausible interpretation, perhaps, is that this is not a policy set in stone but rather an opening salvo in a future negotiation. The threat could be leveraged to extract concessions from individual BRICS members, aiming to fracture the bloc’s unity with the lure of bilateral deals. My hypothesis is that the ultimate goal may not be to erect a permanent tariff wall, but to use the threat of one to force a renegotiation of trade terms on a country-by-country basis. Until that becomes clear, markets will be left to price in the risk of a significant and self-inflicted economic disruption.


References

Associated Press. (2024). Trump says he’ll target BRICS nations that move away from the dollar. He may have a hard time. Retrieved from https://apnews.com/article/trump-dollar-dominance-brics-treasury-8572985f41754fe008b98f38180945c3

Business Standard. (2024). Trump says BRICS aims to hurt US, threatens 10% tariff on member nations. Retrieved from https://www.business-standard.com/world-news/trump-says-brics-aims-to-hurt-us-threatens-10-tariff-on-member-nations-125070801479_1.html

Geopolitical Economy Report. (2024). Trump threatens BRICS over de-dollarization. Retrieved from https://geopoliticaleconomy.com/2025/07/10/trump-threat-brics-us-dollar-western-imperialism/

PBS NewsHour. (2024). Trump threatens tariffs on BRICS nations if they try to undermine U.S. dollar. Retrieved from https://www.pbs.org/newshour/politics/trump-threatens-100-percent-tariff-on-brics-nations-if-they-try-to-undermine-u-s-dollar

The Hindu. (2024). Why is Trump taking aim at BRICS? Retrieved from https://thehindu.com/news/international/why-is-trump-taking-aim-at-brics/article69805150.ece

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