The BRICS initiative of developing a parallel currency has caused concerns in the international economy in the last few months, leading to US president Donald Trump taking action.
In recent years, the BRICS countries — Brazil, Russia, India, China and South Africa — have been strengthening the dialogue of reducing their reliance on the US dollar. The concept of a joint currency emerged after 2008-2009 financial crisis and was given a second wind during the 2023 summit in South Africa. During the summit in Kazan, Russia in October 2024, however, BRICS leaders agreed to concentrate on expanding trade in national currencies, taking into account the challenges of establishing a common currency amid member countries’ differing economic systems and levels of development.
At the same time, the re-elected US president Donald Trump threatened to impose 150% taxes on goods from BRICS countries for the case they attempt to replace the dollar with a new currency. He explained that the measure was designed to protect the US economy from efforts to weaken the dollar’s global standing.
The US threatening to impose high duties is seen from the perspective of national interest and is justified, experts say. However, such a measure would reinforce trade hostilities and would have a negative impact on the world economy. Moreover, there is no consensus within BRICS on the formation of a new currency: China and India are doubting, in view of possible economic risks and imbalances.
As a result, while some BRICS nations may wish to decrease their reliance on the dollar, launching a new joint currency has significant barriers. U.S. threats to impose high duties complicate matters even further, making the ability to establish an alternative currency less and less certain.
