Amid the BRICS bloc’s commitment to de-dollarization initiatives, former US President Donald Trump and his economic advisers are developing plans to combat the alliance and save the US dollar. Indeed, Trump is hopeful to be reelected in the upcoming 2024 Presidential elections, with these efforts to be front and center of his potential policies.
According to a Bloomberg report, Trump and his advisers are pursuing potential penalties for US dollar abandonment. These penalties would be levied on both allies and adversaries who enact bilateral trade in currencies outside the greenback. Such actions would be the most poignant response the United States has made yet to de-dollarization initiatives.
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Donald Trump Seeking to Combat BRICS De-Dollarization
Throughout the last year, the BRICS economic alliance has not been shy in its efforts to lessen the US dollar’s relevance. Indeed, it has taken tangible steps to promote its own local currencies in its place. Subsequently, countries that trade with the BRICS collective have tended to align with those de-dollarization plans.
That has gone mostly unanswered by the United States, although that soon may change. Reports note that that BRICS de-dollarization initiatives are set to be combated by Donald Trump and his economic advisers who are seeking to save the US dollar.
The report notes that people close to the matter identify efforts from Trump and his advisors to address the issue head-on. Specifically, they are seeking penalties in order to maintain the dollar’s exposure in emerging markets. These penalties would be levied on those enacting bilateral trade without the greenback.
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The policies being discussed would potentially include “export controls, currency manipulation charges, and tariffs,” sources said. Moreover, these efforts would seek to hinder the growing movement that first gained steam in 2022.
The United States’ sanctions on Russia following the Ukraine invasion was a pivotal moment. Specifically, it highlighted the weaponization of currencies from the West. In turn, a plethora of nations sought to diversify their currency holdings. The effort was a potential defense against this kind of practice from the West in the future.
However, local currency usage was also an attempt to protect the nation from the dollar’s current state. With US debt reaching record levels, its fragility required diversification. Thereafter, many nations saw an opportunity for their currency to flourish. Yet, Trump’s advisors are seeking to reverse this trend.