Immediately upon assuming office, President Donald Trump reiterated that he would impose 100% tariffs on BRICS nations contemplating de-dollarization. Trump advocates a worldview in which the U.S. dollar remains the undisputed reserve currency, but unlike his predecessors, he perceives BRICS as a serious challenge to the greenback’s predominance. Targeted tariffs combined with incentive structures for alignment with American interests can discourage countries from pursuing de-dollarization policies.
In August 2023, the White House determined that BRICS—a multilateral organization of which the membership now includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates—does not represent a geopolitical threat to the United States due to the divergent priorities of each member. Such an assessment ruled out punitive measures against BRICS.
Trump embraces the opposite view, maintaining that tariffs are a way to motivate countries to align with Washington’s priorities and incentivize domestic manufacturing. Scott Bessent, Trump’s pick for Treasury Secretary, outlined this approach in an interview late last year. Drawing a comparison to the nuclear strategy of escalating to de-escalate, Bessent explained that “you can put tariffs on with the idea of getting rid of all the tariffs.” This is similar to how Washington uses sanctions, but Bessent noted that excessive use of the latter tool can lead countries to abandon the dollar, as demonstrated in the past few years.
Indeed, following Russia’s war in Ukraine, the United States and the European Union moved to seize $300 billion in Russian Central Bank assets. During its last days in government, the Biden administration attempted to convince European leaders that the money should be moved to an escrow account to which Moscow would only get access if it signed a peace deal. Russia recently retaliated with a new legislative initiative that allows it to confiscate assets in “unfriendly” countries.
The problem for Washington is that, although the Kremlin is similarly engaging in asset seizure, Russian President Vladimir Putin has crafted an image of himself as a defender of the Global South’s interests and as responding to Western aggression. Speaking before representatives from African and Asian countries, Putin argues that “we never tried to oust anyone from our market” and that the West relies on “neo-colonial practices” to make African countries “dependent on Western technology and loans.” Putin also frequently repeats that Western countries are responsible for escalation—both military and financial—and that Moscow has been collaborating with developing countries for decades.
Read the rest at RealClear Defense.
Axel de Vernou is a Research Assistant at Yorktown Institute.
