Trump’s threat to BRICS regarding the “currency” could reflect negatively on Washington

With the return of US President-elect Donald Trump to power, there are fears that his threats will be implemented against the BRICS group, which is considering issuing a currency that can compete with the US dollar.

Trump’s threat to impose a 200% tax and ban the exports of any BRICS member country that tries to take such a step aimed at removing the dollar from the throne of its global control led to igniting controversy over the future of the dollar.

At first glance, Trump’s tough defense of the dollar would appear to support his position as a global reserve currency, a role Washington has played since World War II.

But a closer look at the issue indicates that these tactics could reflect negatively on the United States, and push countries such as China to accelerate their efforts to reduce their dependence on the dollar, as well as reduce the reserves they possess of it.

A new financial future

Wary of Washington’s willingness to use the dollar as a geopolitical weapon, China has spent the past decade preparing the groundwork for a new financial future. It has strongly encouraged the global use of its currency, the yuan, through bilateral trade agreements and expanding partnerships under the Belt and Road Initiative.

In addition, the Chinese central bank is diversifying its foreign exchange reserves, moving away from assets controlled by the dollar to gold and other currencies.

Beijing believes that Trump’s recent threats are not a deterrent, but rather a call to action. Indeed, Trump’s preference for tariffs and sanctions as a tool of economic diplomacy has had unintended consequences.

The aggressive use of these measures over the past years has deepened mistrust between America’s trading partners and enemies alike. By converting the dollar into a weapon, countries unwittingly began searching for other alternatives to the American currency.

China and Russia, which are often targets of US sanctions, were at the forefront of this change, as they signed many trade agreements in local currencies, and worked to enhance cooperation within global forums such as BRICS. These steps may not lead to the dollar being dethroned as a global currency during the period. overnight, but it undermines his dominance.

Collective desire

Although the issuance of a new BRICS currency, although still far away, represents a challenge in practical terms, it symbolizes a broad collective desire to build a financial system less affected by American influence.

Trump’s threats may halt or complicate such efforts in the long term, but they also demonstrate the concerns driving these initiatives.

For China, the matter is not only about the dollar, but also about securing its position as a great power, as the multipolar financial system can reduce its exposure to American economic pressure, given China’s greater freedom to pursue its strategic goals.

The experience of the digital “yuan” in China, which is the most advanced digital currency project issued by a central bank in the world, is part of this great ambition, and if it succeeds, it will provide an alternative to the dominance of the dollar in payment systems across international borders, especially in emerging markets.

Unreliable guardian

The irony of Trump’s strategy is that it is accelerating the very trends he is supposedly trying to combat. By doubling down on tariffs and sanctions, Trump is reinforcing the perception that the United States is an unreliable guardian of the global financial system, but in reality this perception has no effect on adversaries. Such as China and Russia, but it also resonates with allies in Europe and Asia who have expressed their concerns about dependence on the dollar.

The European Union’s efforts to use the euro in energy trade are an example of this growing concern. About “Asia Times”

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trust

The US dollar’s dominance depends on confidence that the United States will act as a responsible leader of the global economy, and confidence that assets valued in dollars will remain stable and accessible.

By using the dollar as a weapon, Trump risks eroding this trust, not only among America’s opponents, but also among its allies. As this confidence diminishes, the dollar’s ​​grip on its status as a desirable reserve currency will also diminish.

. Although issuing the BRICS currency represents a challenge in practical terms, it symbolizes a collective desire to build a financial system less affected by American influence.

. For China, it is not only about the dollar, but also about securing its position as a great power.