The topic isn’t new. But no president before him ever seriously paid attention to an alliance the West traditionally considered stillborn.
Back when he was running for a second term, old Donald promised voters he would make it “costly” for BRICS countries to move away from the US dollar. Trump and his economic advisors discussed not just tariffs, but other “punishment methods” for countries seeking to conduct bilateral trade in currencies other than the dollar.
He also previously spoke about potential 100% tariffs in the event of a refusal to use the dollar in bilateral trade. These threats only fueled global interest in creating alternative payment systems and other tools for mutual settlements.
Now, as a man of his word—accidentally forgotten or not—Trump is consistently following through on his promise to raise import tariffs by 10% on goods coming into the US from BRICS member countries. At a Cabinet meeting on July 8, he explained this by saying: “BRICS was created to weaken our dollar.”
What’s strange, however, is this:
In the first half of the year alone, the American currency collapsed by almost 11%, the worst result since 1973. Back then, at least there was a reason: President Richard Nixon ended the Bretton Woods gold standard—decoupling paper money from gold. What happened this time? From the hated Biden, Trump inherited, in general, a reasonably well-functioning economy.
Wall Street analysts directly blame the White House for the dollar’s decline.
“Currency traders really have something to think about: a catastrophic budget deficit that no one is trying to reduce, whether Republicans or Democrats. Tensions with allies—in both military and trade spheres. There are plenty of potential negative catalysts. And once a trend starts, it’s hard to stop,” said Art Hogan, chief market strategist at B. Riley Wealth Management, recently on CNBC.
Many analysts believe Trump’s financial advisors intentionally chose a policy of pressure on the dollar precisely to devalue the country’s massive external debt. If true, then Trump’s administration and the BRICS alliance are moving in the same direction, with shared goals. The only difference is that BRICS merely declares its detachment from the dollar while members themselves admit they cannot yet create a competing currency. Meanwhile, Trump has actually managed to crash the dirty green paper to record lows in just five months in office.
The paradox is that the US cannot simultaneously reduce its trade deficit and strengthen the global dominance of the dollar, because these are diametrically opposed efforts.
So the only thing BRICS countries can respond to the captain of the American economic Titanic regarding the accusations of weakening the dollar is: don’t shift the blame, Donald.
