Trump’s 100% Tariffs Scared 0% of BRICS Members

On November 30, Trump publicly threatened BRICS nations, warning them against pursuing de-dollarization or creating a new international currency. He stated that failure to comply would result in a 100% tariff. Trump also claimed that “There is no chance that the BRICS will replace the U.S. Dollar in International Trade,” and if they tried, it would mean saying “goodbye to selling into the wonderful U.S. Economy,”

However, three key facts contradict him.

Firstly, China, Russia and Iran have already demonstrated through concrete actions that abandoning the dollar is possible.

According to a report by Russia’s TASS news agency, the banking networks of Iran and Russia were officially connected on November 11, allowing users to use Iranian bank cards at ATMs within Russia to receive funds in rubles. The Governor of the Central Bank of Islamic Republic Mohammad Reza Farzin stated, “We have entered into a currency agreement with Russia and fully removed the dollar. Now we only trade in rubles and rials,” He also mentioned that the financial authorities of the two countries have agreed on the exchange rate to be used for foreign trade transactions.

At the 2024 BRICS summit, Putin also stated that nearly 95% of trade between Russia and China is settled in rubles and RMB. According to Reuters, in 2023, the bilateral trade volume between China and Russia reached $240 billion, hitting a new record.

Secondly, in terms of cross-border payment systems, multiple BRICS members are establishing new systems each with the potential to replace the U.S.-dominated SWIFT system.

China launched its Cross-Border Interbank Payment System (CIPS) as early as 2015. As of the end of September this year, 1,566 banks and financial institutions from 117 countries had joined the system. Notably, after Russia was removed from the SWIFT system, CIPS processed 6.6 million transactions in 2023, a year-on-year increase of 50%.

Russia, at this year’s BRICS Summit, introduced the BRICS Pay system, which employs a decentralized Cross-border messaging system developed by Saint Petersburg State University. In this system, each participant manages their own node, ensuring that no single country can impose extraterritorial control over another’s financial system. This decentralized framework is clearly fairer than SWIFT, which, although based in Belgium, operates under U.S. authority, enabling the U.S. to expel participants at will.

According to the Tehran Times, Iran has also introduced a payment system called Shetab, designed specifically for financial cooperation with Asian countries like India and Pakistan. Shetab processes transactions in less than two seconds, making it one of the fastest payment systems in the region. Compared to SWIFT, Shetab is more focused on its optimization and is specifically designed to better meet the needs of Asian users.

Finally, saying goodbye to the U.S. economy in 2024 might not be such a bad thing.

According to the U.S. Federal Budget Accountability Committee, as of October 2024, the US national debt has surpassed $36 trillion. The cost of servicing this debt is $82 billion, which makes up 14% of total federal spending for the 2025 fiscal year, and this is 1% higher than the U.S. military budget.

On November 27, Elon Musk warned, “If we don’t tackle the national debt, all tax revenue will go to paying interest and there will be nothing left for anything else.” If the issue isn’t addressed “the dollar will be worth nothing,”

Chinese strategist Professor Wang Xiangsui further pointed out that, with the debt crisis severely undermining international confidence in the dollar, Trump’s ongoing threats to the BRICS nations with tariffs will only speed up the downfall of the dollar’s dominance.

The BRICS countries are pushing for de-dollarization because the U.S. has weaponized the dollar by using it to sanction Russia, which has undermined trust in the currency. However, Trump’s 100% tariffs would only further weaponise the dollar and deepen the problem.

Furthermore, maintaining the dollar’s dominance will only delay the inevitable collapse of the U.S. debt crisis without addressing the root cause. The real issue lies in the last 30 years of deindustrialization, which has created a gap in skilled labour and a shrinking domestic supply chain, making U.S. manufacturing less competitive and, in some cases, incapable of producing certain goods. As a result, the U.S. struggles with exports and inflation, relying on continuously overissuing currency to sustain an illusion of prosperity.

Trump’s proposal to revive U.S. manufacturing by raising tariffs is also a wishful fantasy. At this point, whatever the U.S. produces, BRICS nations can also produce. If BRICS countries respond to U.S. tariffs with their own, they can easily replace American goods with those from China, Russia, or India. Moreover, many U.S. manufacturers are heavily reliant on Chinese suppliers, and domestic alternatives may not be able to meet the demand.

Take electric cars, for example. Tesla has four factories around the world, and according to InsideEVs, the Shanghai Gigafactory has produced over half of Tesla’s global output for the past seven quarters. Tesla’s Chinese partner, Alsette, reports that more than 90% of the parts for the Model 3 and Model Y made in Shanghai come from local suppliers, which really helps cut down on operating and management costs. This setup also supports the rollout of their upcoming $25,000 affordable electric car. However, if Trump slaps a 100% tariff on Chinese parts, American consumers might have to say goodbye to Tesla.

On the other hand, the rise of China and other BRICS countries has been fueled by generations of skilled workers in assembly and contract manufacturing, sustained government investment in infrastructure that reduces business costs, and companies that thrive through innovation and trial-and-error in a competitive market.

Trump’s desire to undo 30 years of BRICS progress in only 4 years, just shows his arrogance and ignorance. His previous tariff war on China resulted in over 90% of the costs being passed on to American consumers. If he keeps using tariffs as his main tool, the consequences are likely to be even more painful than before. If Trump truly wants to save the dollar, he should demonstrate constructive wisdom and sincerity, rather than resorting to destructive threats to intimidate other countries.