Vikrant Shekhawat : Jan 22, 2025, 09:12 AM
Donald Trump News: US President Donald Trump recently warned the BRICS (Brazil, Russia, India, China and South Africa) countries that if these countries try to establish an alternative currency in place of the dollar, then 100 percent import duty will be imposed on their products. This strict warning from Trump points to possible changes in global trade and financial equations.Reason for Trump's concernThe global dominance of the dollar provides stability and strength to the US economy. If the BRICS countries succeed in introducing a new currency, it may reduce the utility and importance of the dollar. The BRICS countries have previously tried to challenge the US dominance over the global financial system. There was a discussion in this direction at the Johannesburg BRICS summit in 2023 and the Kazan conference in 2024.Are the BRICS countries planning a new currency?The BRICS countries have made several efforts to reduce dependence on the dollar. Russia and China have used their local currencies instead of the dollar for mutual trade in recent years. In addition, Brazilian President Luiz Inacio Lula da Silva proposed a new BRICS currency.China and Russia have promoted the use of yuan and ruble as an alternative to the dollar. The yuan has become the most prevalent foreign currency in Russia after Western sanctions.India's positionIndia has taken some steps to reduce dependence on the dollar, but it is not targeting it. The Reserve Bank of India (RBI) approved international trade in Indian rupees in 2022. Prime Minister Narendra Modi supported financial consolidation among BRICS countries and increasing trade in local currencies.However, India has shown caution about the growing influence of the Chinese yuan. India had refused to use the yuan in oil imports from Russia.Growing steps against the dollar and America's responseTrump's proposal to impose 100 percent import duty is an attempt to stop the new currency plan of the BRICS countries. The center of America's concerns is China's yuan, which it considers the biggest threat to the dollar.Experts' opinionIndian experts say that in any new system, India will have to take care that China does not get the benefit. India will have to strike a balance between its trade interests and global partnership.The way forwardIt will be challenging to strike a balance between cooperation among BRICS countries and dialogue with America. Despite Trump's warning, BRICS countries are engaged in finding new ways to reduce dependence on the dollar. It will be interesting to see how successful these changes in the global financial system are and what steps America takes in response to this.ConclusionEfforts to end the dominance of the dollar can change the global balance of power. However, this process will require not only mutual coordination of BRICS countries, but also the support of other global players. Trump's warning and BRICS' efforts will give a new direction to international trade and politics in the times to come.