US President Donald Trump has once again warned BRICS nations of 100 per cent tariffs if the bloc pushes ahead with de-dollarisation. The warning, repeated through 2025 and into 2026, targets Brazil, Russia, India, China, South Africa and other member states. It comes as India prepares to host the 18th BRICS Summit in New Delhi in September 2026, making the issue directly relevant for Indian trade and policy watchers.
What is De-Dollarisation?
De-dollarisation means reducing reliance on the US dollar for trade, reserves and lending. Countries do this by settling trade in local currencies, building alternative payment systems or holding more gold.
Several factors push nations toward de-dollarisation:
- Concerns over dollar based sanctions, especially after Russia was cut off from parts of the global financial system in 2022
- A wish among developing economies for more control over their own monetary policy
- Rising intra BRICS trade that does not need dollar settlement
- Growth of digital and gold backed payment tools such as BRICS Pay
Certain factors help the United States slow de-dollarisation:
- The dollar remains the most liquid and trusted global currency
- Deep and stable US bond markets attract global investors
- Tariff threats and diplomatic pressure discourage smaller economies from acting alone
- No BRICS member has proposed a single common currency to replace the dollar
What is the history of De-Dollarisation?
De-dollarisation is not a new idea. Talk of reducing dollar dependence has surfaced periodically since the 1970s, but it gained fresh momentum after Western sanctions on Russia in 2022 following the Ukraine war.
BRICS itself was formed in 2009 by Brazil, Russia, India and China, with South Africa joining in 2010. By 2026, the bloc had grown to ten full members including Egypt, Ethiopia, Iran, the UAE and Indonesia, along with several partner countries. Since 2022, Russia and China have expanded rupee, yuan and ruble based trade settlements. Russia and China now settle around 90 per cent of their bilateral trade in rubles and yuan. BRICS members have also built payment infrastructure such as BRICS Pay and the mBridge cross border digital currency project to move away from dollar clearing systems.
How does De-Dollarisation affect the US economy?
The dollar’s dominance gives the United States cheaper borrowing costs and lets it run trade deficits without immediate pressure on its currency. A weaker dollar role could raise US borrowing costs and reduce Washington’s influence over global sanctions.
Independent estimates suggest a 10% BRICS focused tariff alone could raise costs for US consumers and businesses by up to $56 billion dollars annually. Economists have separately noted that a full 100% tariff would raise prices sharply for American importers and consumers rather than only hurting BRICS exporters.
Why did Trump announce 100% tariffs on BRICS nations?
President Trump first raised the tariff threat on Truth Social on November 30, 2024, days after winning the presidential election. He wrote that BRICS nations must commit not to create a new currency or back one to replace the dollar, or they would “face 100% tariffs.”He repeated the warning on January 30, 2025, saying the idea of BRICS moving away from the dollar was “over.” In July 2025, during the BRICS summit in Rio de Janeiro, he escalated further, announcing an additional tariff on countries aligned with what he called BRICS’ anti-American policies. He wrote that “there will be no exceptions to this policy.“
Trump has framed the tariffs as protecting the dollar’s role as the world’s reserve currency and pushing back against BRICS positions on issues such as the Gaza conflict and Western sanctions.
How is BRICS driving and managing De-Dollarisation?
BRICS members are not building one shared currency but expanding parallel local currency tools. Reported initiatives include:
- BRICS Pay, a decentralised payment network linking national systems
- mBridge, a central bank digital currency project used by China, Hong Kong, Thailand and the UAE
- Local currency swap lines between member states
- A proposed gold backed settlement instrument discussed for pilot testing
At the same time, individual members have downplayed a common currency. South Africa’s Department of International Relations and Cooperation said in a statement that there were “no plans to create a BRICS currency.“
South Africa’s Department of International Relations and Cooperation, official statement, December 2024.
A spokesperson for Indonesia’s Foreign Ministry told reporters the country is “not interested in the issue of de-dollarisation.“
Spokesperson, Indonesia’s Ministry of Foreign Affairs, press briefing, early 2025.
India has also kept its distance from currency replacement talk. External Affairs Minister S. Jaishankar has said the dollar’s reserve status is a source of global stability, underlining that New Delhi has no policy to displace it.
S. Jaishankar, External Affairs Minister of India, public remarks reported in 2026.
How will 100% tariffs affect BRICS economies?
A full 100 per cent tariff would roughly double the price of BRICS exports sold into the US market, making many goods uncompetitive there. Sectors likely to be hit hardest include textiles, pharmaceuticals, electronics and metals.
Effects would vary by country:
- India: Exports of textiles, pharmaceuticals and IT hardware could face sharp cost increases, though pharma exempted under health related carve outs could see limited impact
- China: Already facing elevated tariffs, a further 100 per cent rate would deepen the ongoing trade slowdown
- Brazil: Agricultural and commodity exports, already hit by a 50 per cent tariff imposed in 2025, would face further pressure
- Russia: Already under sanctions, direct US trade exposure is comparatively limited
The Peterson Institute has estimated that a full 100 per cent tariff would cause significant GDP losses on both sides of the trade relationship.
Can Trump actually impose 100% tariffs on BRICS nations?
Legally, the US president has tariff authority under trade laws such as Section 232 and the International Emergency Economic Powers Act, so a 100 per cent tariff is technically possible. However, most economists view a blanket 100 per cent tariff on all BRICS nations as unlikely to be implemented in full.
Reasons for this include:
- No BRICS member has actually launched a rival currency, removing the stated trigger
- Such tariffs would raise costs for US importers and consumers
- India and the US are separately negotiating a bilateral trade deal
- Selective tariffs, rather than a blanket rate, have been Washington’s pattern so far
So far, Washington has applied targeted tariffs rather than the full 100 per cent rate, including a 50 per cent tariff on Brazil and elevated tariffs on India linked to energy trade with Russia.
Has this happened before? How do nations handle such tariffs?
Large scale blanket tariffs are rare but not unprecedented. The Smoot-Hawley Tariff Act of 1930 raised average US tariffs sharply and is widely cited by economists as worsening the Great Depression by shrinking global trade.
More recently, the 2018-19 US-China trade war saw tariffs rise as high as 25 per cent on hundreds of billions of dollars in goods. China responded with its own tariffs and sought new trade partners in Asia and Europe rather than fully complying with US demands. History suggests targeted nations typically respond by:
- Diversifying export markets away from the US
- Negotiating partial trade deals to reduce the tariff burden
- Strengthening trade with other partners, as BRICS members are doing through local currency deals
- Absorbing some cost increases rather than making full policy reversals
What happens next?
The 18th BRICS Summit is scheduled for September 12-13, 2026, in New Delhi, with India holding the bloc’s presidency. The summit’s stated focus is on operationalising alternative payment infrastructure rather than declaring a common currency, and divisions among members have so far prevented a joint statement explicitly addressing de-dollarisation.
For India, the summit will be a balancing act, hosting a bloc pushing de-dollarisation while continuing trade talks with Washington. How New Delhi manages that balance will shape India’s trade ties with both the US and its BRICS partners in the months ahead.