Trump's 100% tariffs on BRICS, how will India respond
What's the story
United States President Donald Trump has warned BRICS nations—Brazil, Russia, India, China, and South Africa—of a 100% import tariff if they continue to try to reduce reliance on the US dollar in global trade. Trump made the statement during a press meeting at the Oval Office shortly after his inauguration as the 47th US President. "As a BRICS nation...they'll have a 100% tariff if they so much as even think about doing what they thought," he said.
Trade strategy
Trump's tariff threats part of 'America First' policy
Trump clarified that his statement shouldn't be seen as a threat but as a clear stance on the issue. He also referred to comments by former US President Joe Biden, suggesting that the US has leverage over BRICS nations. This comes as part of his "America First" trade policy under which he plans to set up an "External Revenue Service."
De-dollarization efforts
BRICS nations consider new global currency
The BRICS nations have been mulling a new global currency to curb dollar dominance.This comes after the US threw Russia out of the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which is key to international financial transactions. Iran was cut off from SWIFT in 2012, a step that was seen as having contributed to bringing Tehran to the negotiating table in 2015.
Tariff details
Trump's proposed tariffs and their global impact
Trump has often criticized countries such as India for levying high tariffs on US products and threatened reciprocal tariffs. His administration plans to levy a 10% tariff on global imports, 60% on Chinese goods, and a 25% surcharge on Canadian and Mexican products. These are part of his plan to protect American workers under the "America First" trade policy.
India's response
Clarification from RBI governor
Last month, Reserve Bank of India (RBI) Governor Shaktikanta Das stated that India has not taken any steps toward de-dollarisation and is only looking to de-risk domestic trade from geopolitical upheavals. In his inauguration speech earlier, Trump said his administration would establish an "External Revenue Service to collect all tariffs, duties, and revenues" in order to "tariff and tax foreign countries to enrich our citizens."