Simple solution to Trump’s fears for US dollar status

ONCE again, Donald Trump has threatened 100 per cent tariffs on any country that tries to stop using the US dollar in trade. The president-elect first broached this topic in March in an interview with an American TV network, warning that he “would not allow countries to go off the (US) dollar” because it would be “a hit to our country”.

Then, in September, at a campaign rally he warned: “Many countries are leaving the dollar. They’re not going to leave the dollar with me. I’ll say, you leave the dollar, you’re not doing business with the United States because we’re going to put a 100 per cent tariff on your goods.” Over the weekend he went further and demanded a “commitment”, no less, from these countries that they would neither create a new Brics currency nor back any other currency to replace the “mighty” greenback.

Clearly, he has the Brics grouping – Brazil, Russia, India, China and South Africa, together with new entrants Egypt, Ethiopia, Iran and the United Arab Emirates – in his sights. And yes, there has been a lot of talk about de-dollarisation, especially after the G7 nations froze Moscow’s central bank assets held in EU and American banks and tossed Russian banks off the Swift financial messaging system after the start of the Ukraine war. It was again discussed at the recent Brics summit in Kazan. But it is nowhere near a done deal.