Donald Trump repeats ‘100% tariff’ threat on BRICS nations against de-dollarisation move. But, was he targeting India?

US President Donald Trump on Thursday repeated his threat of imposing a ‘100% tariff’ on BRICS nations if they try to replace the US Dollar with any other currency. 

Trump took to his social media platform Tuth Social to warn that “the idea that the BRICS countries are trying to move away from the Dollar, while we stand by and watch, is OVER.” He said that any nation with creates a “new BRICS Currency or back any other Currency to replace the mighty US Dollar” will face 100 per cent Tariffs. 

“They can go find another sucker nation. There is no chance that BRICS will replace the US Dollar in International Trade, or anywhere else, and any country that tries should say hello to tariffs, and goodbye to America!,” he posted.

Though Trump’s rhetoric is aimed at BRICS nations, including India, it is unlikely that his real target could be India. Reason: India has not been at the forefront of the clamour to reduce reliance on the US dollar or insisting on another currency to replace the Dollar.

India has always taken a pragmatic approach to the replacing dollar when Brazil proposed that BRICS member states should create a common currency for trade and investment among each other, the idea was not met favourably by New Delhi’s delegation. 

Former RBI Governor Shaktikanta Das too made it evident in the January 2024 declaration that the government was not thinking of moving towards de-dollarization and that the U.S. dollar will continue to be the dominant currency. EAM Jaishankar too reiterated India’s stance that it was not thinking to move towards de-dollarization and that the U.S. dollar will continue to be the dominant currency. “We have always maintained that there is no proposal for a BRICS currency,” he said.

The pragmatic approach is because India realises how significant the Dollar is in global financial markets. India also doesn’t want the Chinese yuan emerging as an alternative to the US Dollar. It has earlier resisted the idea of using Yuan for Russian oil imports.

The US and India also enjoy a strategic significance and both countries would not want the tariff threat to cloud bilateral ties. Both countries enjoy a strong trade deal and imposing a 100 per cent tariff on India means US exports will become costlier and less competitive across global markets. This means U.S. consumers would also end up paying double for imported products.

Moreover, New Delhi is now focused on adopting local currency trade and thereby promoting the Indian rupee as an international currency.