News in brief:
– President-elect Donald Trump has threatened 100% tariffs on BRICS nations, accusing them of trying to move away from the US dollar.
– While Trump claims a BRICS currency is being developed, South Africa’s finance minister denies this, stating members aim to trade in local currencies instead.
The United States president-elect, Donald Trump, has threatened to impose 100% tariffs on nations that are part of the BRICS intergovernmental organization. In a post on X, he stated that the US would not stand by while these countries attempt to “move away from the dollar.”
The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER. We require a commitment from these Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they…
— Donald J. Trump (@realDonaldTrump) November 30, 2024
Trump’s statement followed reports from several media outlets claiming to have “good authority” that a BRICS currency was under development. However, during a video interview, South Africa’s Finance Minister, Enoch Godongwana, denied knowledge of such a currency. Instead, he clarified that members are expected to trade with one another in their local currencies instead of using the US dollar.
There’s no #BRICS plan for a common currency. The discussion is around trading among member states using own currencies. 🇿🇦 Finance Minister Enoch Godongwana confirms what we’ve been explaining. pic.twitter.com/Ts68d6hu6U
— Clayson Monyela (@ClaysonMonyela) December 1, 2024
Formed in 2009 by Brazil, Russia, India, and China as a forum to highlight investment opportunities among the member countries, BRICS has since evolved into a geopolitical bloc. Official members currently include the original founding nations along with South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates.
Meanwhile, Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Thailand, Turkey, Uganda, Uzbekistan, and Vietnam were invited to participate as partner countries in October 2024. Around the same time, a mock BRICS currency surfaced, representing Algeria, Argentina, Egypt, Mexico, Nigeria, Saudi Arabia, Iran, and Zimbabwe.
The leading countries in the bloc will likely aim to avoid a premature all-out trade war with the US, the world’s largest economy. Brazil, China, and Mexico, for example, are among the top five suppliers of agricultural goods to the US, with exports valued at over $55 billion in 2023. Tariffs could disrupt this critical source of foreign exchange and create pressure on these nations, particularly as local farmers grow increasingly discontent.
Retaliatory actions could further exacerbate the situation, potentially leading to broken trade channels, as seen in the Russia-Ukraine conflict. South Africa, a prominent member of the bloc, is considered a distribution gateway for American trade on the African continent. Consequently, disruptions in this supply chain could have far-reaching consequences, impacting several nations beyond BRICS membership.
