What do Trump’s threats mean for BRICS countries?

And he wrote Trump In a post on his platform, Truth Social, on Saturday afternoon: “The idea of ​​it is over.” BRICS countries I try to stay away from Dollar While we stand idly by and watch.”

The group mainly consists of (Brazil And Russia And India And China andSouth AfricaAt the beginning of this year, it was extended to the Kingdom of Saudi Arabia Saudi Arabia andUnited Arab Emirates And Egypt And Iran And Ethiopia.

Trump said: “We are asking these countries to pledge that they will not create a new BRICS currency, or support any other currency that would replace it.” Dollar “Otherwise, they will face 100 percent tariffs.”

Although the US dollar is the most widely used currency in global trade and business, a group of countries has called for… BRICSThe group, like Russia and China, aims to challenge the dollar’s status as a global reserve currency. At last year’s summit in South Africa, the BRICS group presented a proposal for the creation of a new currency.

According to the report of the British newspaper “Financial Times”, the threats The newly elected president of the USA Assuming Customs duties The excessive tariffs on US imports from these countries “come as a result of similar threats made by… Mexico And Canada And China Earlier this week, Trump signaled that he intended to use punitive measures to force US trading partners to comply with his demands.

• Trump said he would impose tariffs of 25 percent on all imports from Canada and Mexico and an additional 10 percent on Chinese goods, accusing those countries of allowing illegal immigration and drug smuggling.
• The threats raised the prospect of countermeasures from Mexico and prompted Canadian Prime Minister Justin Trudeau to make a quick visit to Trump’s Mar-a-Lago residence on Friday night.

He was charged last October the Russian presidentVladimir PutinWestern powers “use the dollar as a weapon” and claimed at the BRICS summit in Kazan that the sanctions imposed on Russia since the beginning of the war in Ukraine “undermine confidence in this currency and reduce its strength.”

Putin said: “We are not the ones 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”.

Pressure and negative results

In an exclusive statement to the “Ektisad Sky News Arabia” website, professor of international economics, Dr. Ali Al-Idrisi, says that the threats of the newly elected US President Donald Trump “reflect the American fear of losing… The dominance of the dollar on Global economyEmphasizing that such a step threatened by Trump could have multiple impacts on the plans and goals of the BRICS group.

He explains it:

• “The United States depends on the strength of the dollar as a global reserve currency to support its economy and enhance its political and economic influence globally… Therefore, Trump’s threat reflects America’s desire to deter any attempts that could weaken this hegemony.”
• The imposition of tariffs at such a high rate will escalate trade tensions between the United States and the BRICS countries, which could open the door to wider economic wars that have a greater impact on the global economy.
• Trump’s threats may make investors and companies hesitate to partner with the BRICS countries – if these countries take steps towards an alternative currency to the dollar – for fear of the consequences of these punitive measures, which may affect the flow of investments in the region. .

Regarding the impact of threats on the plans and goals of the BRICS group, he points out that Trump’s threats can lead to negative results, in terms of pushing the BRICS countries to accelerate their efforts to launch an alternative currency or increase the use of local currencies in trade exchanges in order to reduced dependence on the dollar, given that “American pressure can lead to stronger cooperation between the BRICS countries, which strengthens its position as a global hub that seeks to counterbalance Western economic hegemony”.

But at the same time, he believes that the imposition of 100 percent tariffs may hinder the development plans of export-dependent BRICS countries, prompting them to seek alternative markets and innovative solutions to overcome these challenges.

Al-Idrisi believes that such moves can deepen divisions in the global economic system, with the escalation of confrontation between emerging economies and Western countries, stressing that it is crucial for the BRICS countries to deal with these threats with strategic steps, the most prominent of which are:

• Strengthening of own financial institutions, such as New Development Bank.
• Diversify funding sources and markets to reduce dependence on US markets.
• Demonstrating its ability to face American economic pressures.

He believes that “it is possible that in the near future we will witness an escalation of the trade war between the USA and the BRICS countries, which can reshape the global economic map”, as he assesses.

The dominance of the dollar

The US dollar represents about 58 percent Foreign exchange reserves In the world, according to the Fund International MonetaryMajor commodities such as oil are still bought and sold primarily using dollars.

But the dollar’s dominance is under threat, with BRICS’ share of GDP rising and the alliance’s intention to trade in non-dollar currencies – a process known as demonetisation. dollarizationAccording to the report of the American network CNBC.

While research shows that the role of the US dollar as the main global reserve currency is not threatened in the near future.

According to the Atlantic Council’s model that assesses the dollar’s position as the primary global reserve currency, it finds that the dollar is “safe in the short to medium term” and continues to dominate other currencies.

reaction

In turn, Bilal Shuaib, director of the Vision Center for Studies in Cairo, pointed out in exclusive statements to the “Ektisad Sky News Arabia” website that the threat of imposing 100 percent tariffs on the BRICS countries comes as a reaction to the BRICS groups. efforts to adopt an alternative currency to the dollar and reduce its dominance over the global economy “It puts a lot of pressure on countries like China India and Brazil, especially in light of efforts made to reduce dependence on the dollar and establish an independent financial system based on national currencies or a single currency for the BRICS countries.

He adds: The current global financial system, which relies heavily on “Swift“Based on the dollar, it establishes the dominance of the US currency in economic and commercial transactions, which poses major challenges for countries suffering from limited dollar reserves and difficulties in their trade balances.”

The economic expert points out that the next American administration is trying to impose economic and trade policies in order to protect American hegemony, explaining that threats to introduce high tariffs are especially aimed at countries with close economic relations. This trend is also linked to common American economic practices, such as the ongoing trade tensions with China.

Shuaib also warns that the implementation of such measures will have major negative effects, not only on the BRICS countries, but also on the entire global economy, including the United States of America. He concludes his speech by noting that these pressures could force the BRICS group to accelerate its efforts to reduce its dependence on the dollar and find new financial and economic alternatives, such as adopting a single currency for the group’s countries or improving operations in national currencies among them. .

Trump won a landslide election victory earlier this month after pushing for sweeping tariffs on foreign goods imported into the United States, including an additional 60 percent on Chinese goods.