The idea has been a hot topic in recent years, especially among BRICS nations like Russia and China, challenging the dominance of the US dollar. However, that is not going to be very easy for the US, considering its former president, Donald Trump, has already made some tough statements on this issue, the US might fight tooth and nail to retain the supremacy of the dollar in global trade.
In a rather audacious post on X, formerly known as Twitter, Trump addressed a strong message to the BRICS nations: “Go find another sucker!” He warned those countries, especially the nine members of BRICS-Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the UAE -to not create a BRICS currency or back another one that may take the dollar’s place. As per Trump, the attempt to overthrow the dollar would result in 100% tariffs and a cut-off from the lucrative US market.
A Threat or Reality?
BRICS is an intergovernmental group established in 2009 to boost investment opportunities. Recently, the group has shifted its interest to finding alternatives to using the US dollar. As recently as the 2023 BRICS summit in South Africa, the possibility of having a common BRICS currency was discussed, as suggested by Brazilian President Luiz Inácio Lula da Silva.
However, India’s position is clear, India is not actively engaged in de-dollarization. Indian External Affairs Minister S. Jaishankar explained that even though India does try to find alternative trade mechanisms sometimes, because of practical difficulties with some trading partners, it has no intention of maligning the dollar.
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S. Jaishankar’s statement sums up India’s pragmatic approach:
Sometimes trade in dollars becomes difficult because of your policies. We have to look for workarounds, but that’s not an attack on the dollar. We’re just trying to do business.”
Can BRICS Realistically Challenge the US Dollar?
While the idea of a common BRICS currency sounds revolutionary, it faces huge roadblocks. Let’s look at a few:
- Diverse Economies: BRICS countries have vastly different economic structures, levels of development, and strategic interests. Coordinating a single currency among them would be incredibly challenging.
- India’s Reluctance: India, a significant BRICS member, isn’t fully on board. Without India’s participation, any BRICS currency plan lacks credibility.
- US Retaliation: Trump’s warning of tariffs and economic isolation shows how aggressively the US might respond. If BRICS pushes too hard, the US could exploit existing geopolitical tensions—for example, escalating issues between Russia and Ukraine, China and Taiwan, or India and Pakistan.
The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER. We require a commitment from these Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they…
— Donald J. Trump (@realDonaldTrump) November 30, 2024My Opinion on the Matter
I personally believe it’s going to take at least 10-20 years or more for BRICS to even come close to challenging the US dollar’s dominance. Why? Because the dollar isn’t just a currency; it’s a symbol of trust and stability in the global market. BRICS nations would need to overcome their internal differences, build a robust financial infrastructure, and withstand US pressure—all of which are monumental tasks.
Furthermore, if BRICS pushes too hard, America might play a divide-and-conquer game. It could escalate conflicts indirectly to weaken unity among BRICS nations. For example:
- India might see rising tensions with Pakistan or even Bangladesh.
- Russia might face heightened pressure in Ukraine.
- China could be drawn into a Taiwan conflict.
The US has the resources and alliances to make life difficult for BRICS nations, so this is not only an economic battle but a geopolitical one.
ALSO READ | What is BRICS Pay: Russia’s Push for an Independent Payment System
Genuine Advice
If BRICS nations are serious about creating an alternative to the dollar, they should do the following:
- Build stronger economic and political unity among members.
- Focus on gradual de-dollarization, starting with regional trade agreements.
- Develop a trusted financial system backed by gold or other tangible assets.
It’s not going to be easy, and honestly, it might not even be worth it in the short term. Replacing the US dollar is like trying to uproot a 100-year-old tree—it takes more than a few tools.
What Do You Think?
I’ve shared my perspective but would love to hear yours! Is BRICS actually going to make it and take up the reins, or will US dollars reign for decades upon decades? Drop your thoughts in the comments!
Minutes by M31GlobalNews
