Trump’s 100% Tariff Warning: What It Means for India and BRICS?
United States President Donald Trump has warned BRICS nations (Brazil, Russia, India, China and South Africa) that if they reduce their dependence on the US dollar or create an alternative currency, he will put 100% import tariffs. This is in an attempt to stall BRICS de-dollarization efforts which have gained pace after Western sanctions on Russia and the disruption of global financial systems such as SWIFT.
Speaking to reporters while signing executive orders at the Oval Office, Trump said, “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”, making a reference to the reduced usage of dollar bill in global trade.
What Does It Means for India?
India has incrementally taken measures to decrease the dependence on the dollar by liberalizing trade in Indian rupees and mechanisms like Vostro accounts for facilitating trade in local currency.
However, it has clarified that these steps aim to “de-risk” rather than replace the dollar. India remains hesitant to sanction the Chinese yuan as China becomes increasingly influential in BRICS.
The tariff threat by Trump does pose a very significant challenge for India because after China, the US is India’s largest trading partner. A 100% tariff would seriously threaten Indian exports since they will no longer be able to compete well in the US market.
Therefore, India would have to make diplomatic approaches toward the US and assert that it seeks financial stability in its policies without targeting the dollar balancing commitments under BRICS of course.
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