Donald Trump took the oath of office as the 47th president of the United States inside the Rotunda of the US Capitol (File Image)
After taking office, US President Donald Trump said that there could be a 100% tariff on BRICS nations including Spain. The move is expected to have a huge impact on India-US trade relations. The announcement came after Donald Trump took charge as the 47th US president on Monday.
He said that the countries part of the BRICS grouping could face a 100 per cent tariff on trade with the US if they continue their de-dollarisation efforts.
“As a BRICS nation… they’ll have a 100 per cent tariff if they so much as even think about doing what they thought, and therefore they’ll give it up immediately,” Trump told reporters at the Oval Office.
Earlier, Trump had warned BRICS countries against any move to replace the US dollar and had sought a commitment from the nine-member group that includes India, Russia, China, and Brazil.
BRICS Currency And De-Dollarisation
BRICS, formed in 2009, is the only major international group of which the United States is not a part. BRICS consists of ten countries- Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates. However, Spain is not a part of the BRICS.
Over the past few years a few of its member countries, in particular Russia and China, are seeking an alternative to the US Dollar or create own BRICS currency. India has so far not been part of the move.
Earlier in October this year, reports surfaced claiming that BRICS countries are together planning to launch a currency soon, which will put pressure on the US dollar. According to EurAsia Daily, at the Kazan summit, Russia President Vladimir Putin was presented with a symbolic ‘BRICS bill’. However, the head of the country’s Central Bank, Elvira Nabiullina, did not like the idea.
The introduction of a new currency or promoting de-dollarisation can be seen as an effort by countries to reduce their reliance on the US dollar as a prominent medium of exchange and reserve countries. In recent times, several countries have been engaging in trade in alternative systems including national currencies, regional currencies and even cryptocurrencies.
Trump Begins 2nd Term With Plethora Of Promises
Soon after assuming the office, Trump signed a first round of executive orders aiming to assert control of the federal workforce, and withdraw from the Paris climate treaty, among others, to halt a slew of orders passed by the previous Joe Biden administration.
Among the executive orders Trump signed with a flourish in front of a cheering crowd was one mandating that federal workers return to their offices five days a week.
India’s Stance On BRICS Currency And De-Dollarisation
India’s External Affairs Minister S Jaishankar had earlier clarified that India has “no interest” in weakening the US dollar. “There a personal relation between PM Modi and Trump…Where the BRICS remarks was concerened. We’ve always said that India has never been for de-dollarisation, right now there is no proposal to have a BRICS currency. The BRICS do discuss financial transrations…US is our largest trade partner, we have no interest in weakening the dollar at all,” he added.
