‘Find another sucker’: Trump threatens BRICS with massive tariffs, but who will suffer the most?

The US president-elect has demanded global allegiance to the US dollar, threatening to punish all who want an alternative currency

US President-elect Donald Trump has fired a warning shot at the BRICS group of nations, which have been outspoken on confronting the dominance of the dollar in global trade. If the idea gains traction, Trump has promised to impose “100% tariffs,” cutting them off from the “wonderful US economy.” Which country will feel the heat the most? RT explores the economic ties and dependencies to uncover which nations are in the line of fire.

The threat

“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 US Dollar, or they will face 100% Tariffs and should expect to say goodbye to selling into the wonderful US Economy,” Trump said in a post on Saturday on Truth Social.

“They can go find another ‘sucker.’ There is no chance that the BRICS will replace the US Dollar in International Trade, and any country that tries should wave goodbye to America,” he added.

The warning came just days after Trump, whose inauguration is set to take place on January 20, 2025, vowed to slap tariffs on Canada, Mexico, and China upon taking office. China has already been the target of his rhetoric. Trump previously threatened to impose from 60% to 100% tariffs on imports from the country – however, this burden would have to be carried by American companies and consumers that buy from China, as they would have to pay the new costs.

China was an original member of the BRICS bloc, which also initially included Brazil, Russia, India, and later South Africa, but has since expanded to include Egypt, UAE, Ethiopia, and Iran. Türkiye, Azerbaijan, and Malaysia have submitted applications to join BRICS, and several other nations have also expressed interest in joining.

Some members are eager to reduce their reliance on the US dollar, which has dominated global finance as the world’s reserve currency since after World War II, powering over 80% of international trade.

In October, Russian President Vladimir Putin advocated countering the US ability to wield the dollar as a political weapon. He appeared on the stage of this year’s BRICS Summit holding what looked like a prototype of the bloc’s own banknote. However, he stressed that BRICS’ goal is not to abandon the dollar-dominated SWIFT system completely, but rather to build an alternative.

“We are not refusing, not fighting the dollar, but if they don’t let us work with it, what can we do? We then have to look for other alternatives, which is happening,” Putin said.

In 2023, Brazilian President Luiz Inacio Lula da Silva openly questioned why global trade should revolve around the dollar. At the same time, a top Russian official hinted that BRICS nations were actively exploring the creation of their own currency – potentially rewriting the rules of international commerce.

Trump, fresh off an electoral victory fueled in part by his pledge to impose strict tariffs on foreign imports, doubled down on his tough stance by threatening the entire BRICS bloc with 100% tariffs if they proceed with their currency plans. Who’s taking the biggest risk?

The risks for BRICS

Iran

Exports to the US: Minimal, due to existing sanctions.
The US as export destination: Not a significant partner.
Risk assessment: Low. Existing sanctions have already curtailed trade, so additional tariffs would have a negligible impact.

Ethiopia

Exports to the US: Limited, primarily agricultural products.
The US as export destination: Not one of the top five partners.
Risk assessment: Low. The US is a market for Ethiopian goods, but the overall trade volume is modest, reducing the potential impact.

Russia

Exports to the US: Focused on mineral fuels and precious metals.
The US as export destination: Not one of the top five partners.
Risk assessment: Low to moderate. Although the US is a significant market, Russia has a diversified export portfolio and the current geopolitical landscape doesn’t allow Moscow to engage in trade with the US as much as it used to before the flare-up in Ukraine in 2022, which may soften additional tariff impacts.

Egypt

Exports to the US: Mainly textiles and agricultural products.
The US as export destination: Not one of the top five partners.
Risk assessment: Moderate. The US is a key market for Egyptian textiles, so tariffs could negatively affect this sector.

South Africa

Exports to the US: Vehicles and minerals are top exports.
The US as export destination: Not one of the top five partners.
Risk assessment: Moderate to High. The automotive sector, a major part of South Africa’s economy, could face significant challenges due to tariffs.

United Arab Emirates

Exports to the US: Mainly petroleum products, aluminum and precious metals.
The US as export destination: Not one of the top five partners.
Risk assessment: Moderate to High. Key export sectors like aluminum could take a big blow, disrupting the UAE’s trade balance.

India

Exports to the US: Exports include pharmaceuticals, textiles, and machinery.
The US as export destination: Top export partner.
Risk assessment: High. The US is a major market for Indian goods. Tariffs could disrupt multiple industries, especially IT services and textiles.

Brazil

Exports to the US: Crude petroleum and aircraft are leading exports.
The US as export destination: Second-largest export partner.
Risk assessment: High. The country has a significant reliance on the US market, especially for high-value goods like aircraft. This makes Brazil highly vulnerable to tariffs.

China

Exports to the US: Exports encompass electronics, machinery, and textiles.
The US as export destination: Largest export partner.
Risk assessment: Very High. As the largest exporter to the US, China would face substantial economic repercussions from a 100% tariff, affecting numerous sectors. Outside the BRICS context, Trump has already threatened China with tariffs, so Beijing may already be considering its options, with or without a dollar alternative.

While BRICS nations are mulling challenging US economic dominance, they should tread carefully, since the US holds a formidable trade position, especially under the assertive policies of President-elect Trump. The US remains a top export destination for key BRICS members – China, India and Brazil. Those countries rely heavily on US markets. America’s strong economic leverage, combined with Trump’s history of aggressive trade tactics, positions Washington to exert significant pressure on individual members of the group.

The risks for the US

If imposed, Trump’s tariffs would not only affect certain BRICS economies, but also the US itself. Here’s how it could play out:

Higher costs for US consumers

China: As the largest exporter to the US, a 100% tariff on Chinese goods (electronics, machinery, textiles) would lead to serious price hikes.
Impact: Higher costs for essential consumer goods would contribute to inflation. The cost of living for Americans would rise, which would disproportionately affect low- and middle-income households.

Supply chain disruptions

India and Brazil: India is a key supplier of pharmaceuticals, and Brazil exports crude oil, agricultural products, and aircraft components.
Impact: 100% tariffs would lead to shortages or increased costs in critical industries like healthcare and aviation. US manufacturers might find it quite tough to replace these imports quickly.

Retaliatory tariffs

BRICS+ nations are likely to respond with retaliatory tariffs on US exports, including agricultural products, machinery, and technology.
Impact: US farmers and manufacturers would have to face a decrease in access to key international markets. This would reduce their competitiveness and lead to potential job losses in these sectors.

Geopolitical consequences

Economic Isolation: By targeting BRICS+, the US risks accelerating their efforts to de-dollarize the global economy, which would in time reduce the dollar’s power.
Impact: This could erode the US position in global finance, diminishing its ability to use economic weight to influence geopolitics.

Stock market volatility

The combination of inflation, supply chain disruptions, and declining international trade would likely send financial markets into chaos.
Impact: Investors may pull back, leading to volatility in stock prices and potentially dampening business investment.

The US industries which would feel the heat the most are the following:

Electronics and technology

Main source: China
Impact: China accounts for a significant share of electronics imports (such as smartphones, computers, and semiconductors), and a 100% tariff would dramatically increase costs. Domestic technology companies would struggle to source affordable components, leading to higher consumer prices and slowed innovation.

Pharmaceuticals

Main source: India
Impact: India is a major supplier of generic drugs and active pharmaceutical ingredients to the US. Tariffs would raise healthcare costs, potentially creating shortages and increasing reliance on expensive alternatives.

Automotive

Main source: South Africa and Brazil
Impact: South Africa exports vehicles and parts, while Brazil supplies steel and aluminum. Tariffs would disrupt supply chains, raising manufacturing costs for cars and trucks and pushing prices higher for consumers.

Aerospace

Main source: Brazil
Impact: Brazil’s aircraft industry, particularly Embraer, provides parts and planes to US companies. Tariffs would disrupt this collaboration, increasing costs for airlines and aerospace manufacturers.

Agriculture and food

Main source: BRICS countries
Impact: Imports like coffee (Brazil), tea (India), fruits, and seafood from BRICS countries would face sharp price increases, making these staples more expensive for US consumers and disrupting food supply chains.

Even though imposing 100% tariffs might align with Trump’s ‘America First’ policy and may even give a short-term boost to the domestic industries, the long-term risks outweigh the benefits significantly. Prices for consumers would be higher, supply chains would be disrupted, and BRICS could retaliate – all of which could hamper US economic growth, increase inflation, and weaken the dollar’s dominance.

The prospects

Could BRICS counter the tariffs?

Yes, and there are several strategies they might use. Firstly, they could strengthen trade ties within the bloc, reducing reliance on US markets. Additionally, they could explore deeper trade relationships with non-aligned nations. The use of local currencies in trade could further push BRICS to pursue the creation of a payment system outside of the dollar. Countries that rely the most on US imports could try to subsidize the affected industries to maintain their competitiveness while they transition to alternative markets. On top of that, BRICS members could increase their global economic weight by framing the US tariffs as poisonous to global trade stability.

Is de-dollarization actually possible?

The idea of reducing reliance on the dollar in international trade and finance is gaining momentum. However, even if the BRICS countries try to move forward with that strategy, it is not going to be easy, as US dollar dominance is deeply rooted in trust, liquidity, and the widespread use of dollar-denominated assets. Its replacement, or even the reduction of its use in world trade, requires not just new technical infrastructure, but also widespread agreement to adopt it by global trading partners. Recent developments – increased trade in local currencies and BRICS currency discussions – reflect serious intent, but the road ahead will likely be a slow one. For now, the group can prioritize small steps, such as creating and implementing independent digital payment platforms.

A mathematical model published in 2023 in ‘Applied Network Science’ predicts that BRICS has strong potential to establish dominance in international trade through a unified currency. According to this study, based purely on trade flows and excluding political factors, about 58% of countries would already prefer a BRICS-backed currency over the US dollar (19%) or euro (23%).

Could Trump actually introduce tariffs?

It seems moderately possible. Protectionist policies align with his campaign promises, and his previous term showed that he was willing to use tariffs to achieve his political and economic goals – for example, a trade war with China. However, the potential price hikes may lead to public backlash, which could deter the move. US allies in Europe and other regions may also oppose the tariffs if they destabilize global trade and economic relations. Notably, Trump has previously used threats as a geopolitical tool without actually following through on them. He could be employing a similar tactic again.