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Global Currency War: Trump's 100% Tariff Threat to BRICS, And Why India is Backing the US Dollar

In a dramatic escalation, former US President Donald Trump has threatened to impose 100% tariffs on BRICS nations, accusing the bloc of an "attack on the US Dollar." He claims countries are "dropping out" due to his threats. However, official data shows BRICS is expanding. Crucially, India-a founding BRICS member-has firmly stated it has "no interest" in de-dollarisation, valuing its massive trade relationship with the US above the bloc's ambitious currency plans.

(Insight Analysis | Updated: October 16, 2025) – The world of international finance is witnessing a high-stakes showdown. Former US President Donald Trump has directly targeted the BRICS economic bloc, setting the stage for a potential global trade and currency war. His weapon of choice? The threat of unprecedented tariffs.

The context for this clash is the long-standing ambition of some BRICS nations to reduce their dependence on the US Dollar-a process known as 'de-dollarisation'.

Trump's "Tariff Bomb": A Blunt Instrument to Protect the Dollar

On October 15, 2025, US President Donald Trump made his stance brutally clear. Speaking to reporters, he labeled BRICS an "attack on the dollar" and issued a stark warning.

In his own words: "I told anybody who wants to be in BRICS, that's fine, but we're going to put tariffs on your nation. Everybody dropped out. They're all dropping out of BRICS... They don't even talk about it anymore."

This claim of a BRICS exodus is, however, sharply contradicted by the facts. Let's look at the data:

• Original BRICS (2009-2010): Brazil, Russia, India, China, South Africa.

• New Members (2023-2024): Egypt, Ethiopia, Iran, UAE, and Indonesia.

Far from collapsing, the bloc has expanded, adding five new members in two years. This gap between Trump's claims and on-ground reality highlights the political nature of this economic battle.

The Root of the Conflict: Why BRICS Wants to Move Away from the Dollar

To understand Trump's strong reaction, one must understand the core motivations within BRICS:

1. Reducing Vulnerability: Many countries hold debt and import essential goods (like oil) in dollars. When the US Federal Reserve raises interest rates, the dollar strengthens, making these debts and imports more expensive for other nations. A common currency could shield them from this volatility.

2. Political Autonomy: Reducing reliance on the dollar-based global financial system (including systems like SWIFT) gives nations more political independence, as seen in the case of Russia after its invasion of Ukraine.

3. A Multi-Polar World: BRICS fundamentally represents a vision of a world not dominated by a single superpower, but with multiple centers of economic and political influence.

Brazil's President Lula da Silva has been a vocal proponent, arguing that a BRICS currency "increases our payment options and reduces our vulnerabilities."

India's Strategic & Pragmatic Stance: A Bridge Between Worlds

While the rhetoric flies, India has adopted a position of clear-eyed pragmatism. As a founding BRICS member with strong ties to the West, its voice is critical and telling.

India's External Affairs Minister, Dr. S. Jaishankar, has consistently articulated this balanced policy:

December 2024: He stated,"We have never been for de-dollarisation... The United States is our largest trade partner, and we have no interest in weakening the dollar at all." He also clarified that there is "no proposal" for a BRICS currency currently.

• March 2025: He reinforced that the US dollar is a "source of international economic stability," which the world needs more of, not less.

Why is India taking this stand? The reasons are deeply practical:

• Massive Trade Partnership: The US is India's single largest trade partner. Disrupting the dollar-based system would directly harm India's own economic growth.

• Lack of BRICS Consensus: Dr. Jaishankar has pointed out that BRICS members lack a unified position on creating a new currency. Pushing for it would be futile and divisive.

• Strategic Calculus: India benefits from a "multi-polar" world, but not at the cost of destabilizing the global economic system from which it greatly benefits. Strengthening ties with the US is a strategic priority.

Expert View: Is a BRICS Currency Even Practical?

Most financial experts and institutions like the Atlantic Council agree that creating a common BRICS currency is more of a "political project" than a near-term economic reality. The challenges are immense:

• Diverse Economies: The economic structures, inflation rates, and political systems of BRICS members are vastly different, making a unified currency like the Euro incredibly difficult.

• Lack of a Central Bank: A common currency requires a central fiscal authority, which currently does not exist and would require a huge surrender of national sovereignty.

• The Dollar's Deep Entrenchment: The US dollar still dominates over 60% of global foreign exchange reserves. Replacing this network effect is a monumental task.

What This Means for the Future

The situation presents a complex geopolitical landscape:

1. Trump's Strategy: Using tariffs as a deterrent to maintain US economic primacy.

2. BRICS' Reality: An expanding but ideologically divided bloc, where grand currency plans face steep practical hurdles.

3. India's Role: Acting as a crucial balancing power, committed to BRICS as a political forum but anchored by its pragmatic economic interests with the US and the West.

For now, the US dollar's reign continues, but the push for a multi-currency world is undeniably gaining momentum. India's diplomatic tightrope walk will be one of the most critical factors to watch in determining the outcome of this quiet global currency war.

(Source-Hindustan Times)


Disclaimer: This analysis is based on current public statements and reports. The situation is fluid and subject to change based on policy shifts.

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