Upon taking office in January 2025, President Trump wasted no time addressing the geopolitical shift toward local currency trade. Using his signature “America First” rhetoric, he issued a clear warning via social media and official addresses:
“We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. dollar; they will face 100 percent tariffs.”
The logic was simple: the United States remains the world’s most lucrative consumer market.6 For BRICS nations—many of which rely heavily on exports to the U.S.—the choice was between pursuing a speculative new currency or maintaining access to the American economy.
Did the Threat Work? The Immediate Chill
The impact of Trump’s rhetoric was almost instantaneous, particularly regarding the high-profile goal of a common BRICS currency.
1. The Death of the “BRICS Unit.”
Before the threat, rumors of a gold-backed “Unit” or a digital BRICS currency were at an all-time high following the 2024 Kazan Summit. However, by mid-2025, the tone shifted. Brazil’s President Lula da Silva, once the most vocal proponent of a shared currency, notably softened his stance.7 By the time Brazil prepared for its 2025 BRICS presidency, the common currency project had been quietly moved to the back burner.
2. Putin’s Remarkable Reversal
Perhaps the most surprising shift came from Russia. Despite being under heavy Western sanctions, Vladimir Putin stated in late 2024 and early 2025 that Russia was “not seeking to abandon the dollar,” but was rather “forced” to seek alternatives due to U.S. restrictions.8 This signaled a pivot from active aggression against the dollar to defensive survival.
3. India’s Strategic Distance
India has consistently been the “swing vote” within BRICS. Faced with the 100% tariff threat, Indian officials, including External Affairs Minister S. Jaishankar, clarified that India has no policy to replace the dollar, viewing it as a cornerstone of global economic stability.9 For India, a $120+ billion trade relationship with the U.S. outweighs the ideological lure of de-dollarization.
The Reality: De-Dollarization Hasn’t Stopped, It’s Just Changed
While the 100% tariff threat successfully “killed” the immediate prospect of a unified BRICS currency, it did not stop the underlying trend of local currency settlement.
| BRICS Common Currency | Stalled. Effectively dead as a short-term goal due to U.S. tariff pressure. |
| Bilateral Trade (Local Currencies) | Growing. Russia and China settle ~90% of trade in Yuan/Rubles. |
| Digital Payment Systems | Advancing. BRICS Pay and China’s CIPS continue to expand. |
| Central Bank Reserves | Diversifying. Gold purchases by BRICS central banks hit record highs in 2024–2025. |
The “Under-the-Radar” Shift
While Trump declared “BRICS is dead” in February 2025, the bloc moved its efforts into less “taxable” areas. Instead of creating a new currency—which would trigger the 100% tariff—nations are building the plumbing for a dollar-free world:
- BRICS Pay: A decentralized payment messaging system that functions like SWIFT but avoids dollar-clearing houses.
- Energy Settlements: India and the UAE have completed crude oil transactions in Rupees, and China continues to push for the “Petroyuan.”
The Economic Risks of the 100% Tariff
Economists from the Peterson Institute for International Economics (PIIE) and other foreign think tanks claim that Trump’s strategy has two drawbacks. Despite protecting the dollar’s reputation, it has significant domestic risks:
- Inflationary Pressure: A 100% tariff on BRICS goods (which include essential electronics, textiles, and raw materials) would cause a massive price spike for American consumers.12
- GDP Contraction: Projections suggest that if these tariffs were fully implemented, U.S. GDP could be hundreds of billions of dollars lower by the end of the term due to disrupted supply chains.13
- Accelerated Resentment: Many analysts argue that “weaponizing” the dollar through trade threats only proves the BRICS’ point: that the world is too dependent on a single, politically volatile currency.
Why the Dollar Remains King (For Now)
Despite the BRICS’ ambitions and the U.S.’s aggressive defense, the dollar’s dominance is backed by more than just threats.14 It relies on:
- Liquidity: No other currency (including the Yuan) can be traded as easily in such massive volumes.
- Rule of Law: The U.S. financial system is transparent and predictable compared to many BRICS counterparts.
- No Alternatives: The Euro is limited by regional politics, and China’s capital controls hamper the Yuan.
As of late 2025, the U.S. dollar still accounts for nearly 90% of global foreign exchange transactions and roughly 58% of international reserves.
Conclusion: Did the Threat Work?
The answer is a nuanced yes and no.
Yes, the 100% tariff threat worked as a deterrent against a formal BRICS currency. The political risk of losing the U.S. market was too high for nations like India, Brazil, and the UAE. Trump successfully forced a public retreat from the most aggressive de-dollarization rhetoric.
No, it did not stop the structural diversification of the global economy. BRICS nations are still reducing their reliance on the dollar through bilateral trade and digital payment infrastructure.16 The “threat” may have won the battle for the headlines, but the long-term struggle for financial multipolarity continues “under the hood.”
