These days, a big discussion is happening worldwide that is BRICS vs Dollar: Is the reign of the US dollar finally coming to an end? For years, the dollar has been the world’s strongest currency. But now, BRICS nations are preparing to challenge this dominance.
Who are the BRICS nations?
BRICS is a group of countries – Brazil, Russia, India, China, and South Africa. Recently, it has grown stronger with the addition of Egypt, Iran, and the UAE. These nations want the world to reduce its dependency on the dollar and start using their currencies at the global level.
Why Does BRICS Want to Use Its Own Currency Instead of the Dollar?
The BRICS nations want, for example, if India and Russia trade with each other, they can make payments in rupees or rubles instead of dollars. This will reduce their dependency on the US banking system and the dollar.
Why is this important for them?
The US has imposed economic sanctions on countries like Russia and Iran multiple times, which creates challenges for them in international trade. Since most of the global trade happens in dollars, America uses this power to enforce its politics.
Why Is Trump Worried About BRICS?
The US dollar is not just a piece of paper; it is America’s biggest weapon of power.
- Most of the world’s trade in oil, gas, gold, and large transactions is conducted in dollars.
- This gives the US control over the global economy.
- If any country goes against the US, it can punish them economically using the power of the dollar.
Now, if BRICS nations start trading in their own currencies instead of the dollar, America’s grip will weaken over time. That’s why Trump has warned BRICS that if they create a new currency and replace the dollar, he will impose 100% tariffs on them.
He clearly stated on his social media platform, Truth Social, that if BRICS countries leave the dollar, they should forget about doing business in America.
Will Trump’s Threats Work?
Trump’s threats are part of his ‘America First’ policy. He has previously threatened to impose heavy tariffs on China, Mexico, and Canada to protect the American economy. However, the BRICS situation is different.
Countries like Russia and China do not fear the US and are ready to take any steps necessary for their interests. Countries like India, which maintain good relations with the US, are also working actively within BRICS for their benefits. Therefore, it is difficult to say whether Trump’s threats will stop BRICS or not.
Can BRICS Replace the Dollar?
Currently, it is not possible for any currency to replace the dollar immediately.
The reasons are:
- 58% of the world’s foreign currency reserves are held in dollars.
- Replacing the dollar is not easy politically, economically, or technically.
- BRICS nations are currently focusing more on strengthening their individual currencies rather than rushing to launch a new joint currency.
Last year, Vladimir Putin stated that BRICS is not in a hurry to bring a new currency right now. Still, BRICS’ growing influence and attempts to bypass the dollar are concerning for Trump and the US.
KNOW ABOUT BRICS
Is BRICS vs Dollar Really a ‘Currency World War’?
Trump is calling this economic battle a ‘Currency World War’, and it truly is a different type of war. This fight is not with guns or bombs but with money and power.
- BRICS nations want their voice to be heard globally.
- The US wants to maintain its dominance through the dollar.
That is why BRICS vs dollar issue is critical for the global economy.
ALSO READ- How India is Giving New Strength to BRICS
Conclusion: What Lies Ahead?
Trump is worried about BRICS because if these nations succeed in trading in their own currencies instead of the dollar, America’s global power will decline.
The dollar is not just a medium of exchange; it is a symbol of America’s grip on the world. BRICS nations want to weaken this grip to increase their significance globally.
Will BRICS succeed, or will Trump’s threats stop them? We will find out in the coming years, but for now, this ‘Currency World War’ remains under the world’s watch.
Which countries are included in BRICS?
BRICS includes Brazil, Russia, India, China, South Africa, Egypt, Iran, and the United Arab Emirates.
Why is Trump worried about BRICS?
The ongoing BRICS vs Dollar debate is because Trump fears that if the BRICS countries replace the dollar with their own currencies for trade, it will reduce America’s economic power and global influence.
Can BRICS really replace the dollar?
Currently, it is not immediately possible, but BRICS nations are trying to gradually reduce their dependency on the dollar.
