President-elect Donald Trump threatened the BRIC group of emerging-market nations with 100% tariffs on Saturday if they make any moves to challenge or replace the U.S. dollar as the primary global reserve currency. The BRIC alliance, originally consisting of Brazil, Russia, India, and China, now includes five additional countries. Trump stated that he requires a commitment from these countries to not create a new BRICS currency or back any other currency to replace the U.S. dollar. He warned that failing to comply would result in tariffs and potentially losing access to the U.S. economy. Trump’s threats come in response to efforts by the BRIC nations to move away from the U.S. dollar, with Russian President Vladimir Putin accusing the U.S. of weaponizing the dollar.
Tariffs are essentially taxes on imported goods paid by importers and passed on to consumers. Trump has proposed large tariffs on imported products to boost the U.S. economy, with experts warning of increased inflation and decreased growth. In 2018, Trump imposed tariffs on $380 billion worth of goods, claiming that foreign countries pay the tariffs, but studies show that the burden falls on domestic consumers. Recently, Trump proposed tariffs against Mexico, Canada, and China as part of efforts to combat issues like drug overdoses and illegal immigration. Talks between Trump and the leaders of these countries have taken place, with uncertainty remaining over the potential implementation of tariffs.
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