Donald Trump might have just struck a nerve with his ‘buddy,’ the Russian president Vladimir Putin and the entire BRICS coalition. As we reported over the weekend, the US president lashed out at the bloc, warning them against creating a new currency to challenge their dollar. Trump threatened 100% tariffs on all of them if they dared replace the greenback. With the BRICS pushing de-dollarization harder than ever, Trump’s ultimatum may create a fracture in his complex relationship with Putin, who has actually cautioned him against it. Trump’s threats shake global markets BRICS nations control over 40% of the world’s central-bank reserves and have floated the idea of a unified currency for trade. While economists like Mark Sobel, a former US Treasury official, dismiss the idea as “hot air,” others believe Trump’s rhetoric could accelerate these efforts. “The dollar remains dominant for several reasons: it’s the most liquid currency, trades freely, and is the world’s lending currency,” said Rodrigo Catril of National Australia Bank in Sydney. But he also warned that Trump’s heavy-handed tactics might push BRICS countries to move faster on reducing reliance on the greenback. Right now, the dollar dominates 88% of all daily foreign exchange trades. Still, cracks are forming. Brazil and China already trade in their own currencies, while India and Malaysia have signed agreements to boost rupee transactions. Even Thailand and China have inked deals for local currency swaps. Trump’s threats may force more such agreements into reality. The Putin factor: A diplomatic gamble Trump’s tough talk risks complicating his carefully cultivated relationship with Putin. For years, Trump has publicly praised the Russian president, even calling him a “genius” at one point. But this admiration masks a transactional relationship. Both leaders have used their rapport to advance their own agendas, from Syria to Ukraine. But with sanctions biting and global trade shifting, Putin has long sought to weaken US financial hegemony. Though he did express a desire to abandon his de-dollarization plans for Trump, so the president-elect’s latest remarks were quite literally needless. He is testing the limits of their so-called friendship. Trump’s push to maintain dollar dominance is nothing new. During his first term, he weaponized tariffs as a bargaining tool, from China to Europe. But this time, he’s targeting an entire bloc of nations that collectively make up a significant portion of the global economy. This dominance is backed by the unparalleled size of the US economy and the trustworthiness of its Treasury bonds. Even during crises, the greenback remains the ultimate safe haven. But analysts warn that the more the US flexes its financial muscle, the more other nations might seek alternatives. The long road to de-dollarization For all the noise, creating a new BRICS currency is easier said than done. The logistics are daunting. A single currency would require coordination across vastly different economies, with varying levels of development and governance. Russia, under Putin, has been particularly aggressive. Facing what he believes to be unfair Western sanctions by Biden and NATO, as well as a declining ruble, Moscow embraced de-dollarization as a survival strategy. One that Putin thought he didn’t need anymore. Trump’s love for tariffs is no secret. From steel to soybeans, he’s used them as both carrot and stick throughout his political career. His latest 100% tariff threat against BRICS nations fits the pattern, but the implications are far-reaching. For one, tariffs could hurt American businesses and consumers, as costs get passed down the supply chain. They could also deepen rifts with allies and trading partners, making it harder for the US to rally support against China or Russia. How Trump gets through this delicate situation could define not only his presidency but also the future of US relations. Will his friendship with Putin survive this latest clash? Or will economic nationalism drive a wedge between them? The world is watching. Land a High-Paying Web3 Job in 90 Days: The Ultimate Roadmap
