mega swerte Will Trump’s Dollar Diplomacy Roil Global Trade?
The dollar is rising again this morning. The greenback’s post-Election Day rally has investors betting that Donald Trump’s low-tax, high-tariff economic agenda could disrupt global trade and accelerate inflation.
The president-elect has added a new threat to his list, saying that he could slap big tariffs on the BRICS group of countries if they were to abandon the dollar.
“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 will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy,” Trump posted on his Truth Social network this weekend.
Dmitry Peskov, a Kremlin spokesman, said this morning that the dollar’s appeal is already in decline, and Trump’s latest threats would backfire.
Trump’s warning comes after Vladimir Putin held a gathering of world leaders. In October, the Russian president hosted the BRICS group, which also includes Brazil, India, China and South Africa, and other emerging market economies that he hopes could become a counterweight to the West. (More on the Russian ruble below.)
Moscow and Beijing want to reorder the global markets in part to defang U.S. sanctions, and Brazil has proposed an alternative currency for the Mercosur trade bloc. But economists see no imminent risk to the dollar’s lock as the world’s global reserve currency.
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