Trump's 100% tariff threat on BRICS depends on whether U.S. laws would permit it, says ex-RBI governor

Former RBI Governor questions feasibility of Trump's threat to impose 100% tariffs on BRICS countries moving from US dollar.

U.S. President-elect Donald Trump’s warning that BRICS countries will face 100% tariffs if they choose to move away from the U.S. dollar is unclear to what extent he will carry out his threat, as it remains to be seen if the U.S. laws permit such an action, former RBI Governor Duvvuri Subbarao said on Monday (December 2, 2024).

He also said even for BRICS, there are internal differences about bringing out an alternative to the U.S. dollar. The nine-member group that includes India, Russia, China, and Brazil, moving out of the U.S. currency and having a common one remains a non-starter because of both politics and economics.

"Donald Trump has threatened to slap 100% tariffs on imports from countries that try to move out of the dollar. His ire was particularly directed at the BRICS bloc which has been actively talking about developing an alternative to the dollar. Trump is known to bark more than he bites," Mr. Subbarao told PTI.

BRICS, formed in 2009, is the only major international group of which the U.S. is not a part. Its other members are South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates.

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Over the past few years, a few of its member countries, in particular Russia and China, are seeking an alternative to the U.S. dollar or creating their own BRICS currency. India has so far not been part of the move.

"It’s not clear to what extent he will carry out his threat. What yardstick will America use to determine if a country has moved out of the dollar? And does American law permit imposing sanctions on countries merely because they are de-dollarising?,” the former RBI chief asked.