President-elect Donald Trump has issued a combative warning to the BRICS alliance—led by Brazil, Russia, India, China, and South Africa—over its plans to reduce reliance on the U.S. dollar.

In a fiery post on X (formerly Twitter) on Sunday, Trump declared that any attempt to create an alternative currency or financial system would be met with punitive tariffs of up to 100% and potential exclusion from the American market.

“The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER,” Trump wrote. “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 U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy.”

Trump’s statement underlines a potential escalation of tensions between the United States and the BRICS bloc, which has been working to challenge the dollar’s dominance in global trade and finance. The nine_member BRICS nations, representing more than 40% of the world’s population and some of the largest emerging economies, have recently intensified efforts to reshape the global financial order through initiatives such as a gold-backed currency and a financial messaging system independent of the U.S.-dominated SWIFT network.

Since its formation in 2006, BRICS has sought to counterbalance the dominance of Western institutions like the International Monetary Fund (IMF) and World Bank. The bloc’s recent efforts to reduce dependency on the U.S. dollar have gained urgency due to geopolitical developments, particularly Western sanctions on Russia following its invasion of Ukraine in 2022.

One of the most significant sanctions imposed on Russia was its exclusion from SWIFT, effectively cutting off its financial institutions from the global market. This punitive action has underscored for BRICS nations the risks of reliance on Western-controlled systems and has driven their pursuit of an independent financial messaging platform.

Unlike SWIFT, the proposed BRICS system would be controlled by state-owned banks within the bloc, ensuring its autonomy from Western influence.

Alexander Babakov, Deputy Chairman of the Russian State Duma, emphasized the importance of this initiative, saying: “The financial agenda of BRICS has a main initiative for building a new economic reality…creating our own financial messaging system for the BRICS countries…based on state-owned banks capable of clearing settlements of counterparties from the BRICS countries.”

The Gold-Backed Currency

Another major initiative under consideration by BRICS is the creation of a gold-backed currency. This proposal reflects dissatisfaction with fiat currencies like the U.S. dollar, whose value depends on government trust rather than tangible assets. Many argue that a gold-backed currency would provide stability and protect member nations from dollar fluctuations, which are often influenced by U.S. monetary policy and growing national debt, now exceeding $34.4 trillion.

While a gold-backed currency could revolutionize trade within BRICS and attract other nations seeking to diversify their reserves, analysts remain skeptical about its feasibility. Developing such a currency would require extensive coordination among member nations with differing economic priorities, as well as robust systems for implementation and regulation.

What the U.S. Really Fears

Following Trump’s fiery rhetoric, analysts believe that Washington’s primary concern is not a hypothetical BRICS currency—still a remote possibility—but the bloc’s increasing ability to bypass U.S.-led sanctions. A BRICS-controlled financial messaging system or a gold-backed trading mechanism would reduce reliance on the dollar, making it harder for the U.S. to use economic sanctions as a geopolitical weapon.

Such developments would be particularly troubling for the U.S. as more countries—especially those with contentious relationships with Washington—are aligning with BRICS to shield their economies from potential American sanctions.

Potential Fallout for Trump’s Russia Ties

Trump’s warning to BRICS nations could also complicate his relationship with Russian President Vladimir Putin. Trump has frequently been criticized for his relatively amicable stance toward Putin, often claiming that fostering strong ties with Russia is key to global stability. However, taking a hardline stance against BRICS—a bloc in which Russia plays a leading role—risks straining this dynamic.

Putin has been a vocal advocate for initiatives that diminish U.S. influence over global financial systems. Russia’s exclusion from SWIFT has only strengthened Moscow’s resolve to promote alternatives. If Trump pursues a policy of economic aggression toward BRICS, it could put him at odds with Putin’s ambitions, potentially undermining the rapport Trump has cultivated with the Russian leader.

Implications for the U.S. Economy

Trump’s rhetoric signals a shift toward more aggressive economic nationalism, but it also raises questions about the long-term viability of such a strategy.

Financial analysts warn that Trump’s combative approach toward BRICS could backfire, accelerating the bloc’s efforts to bypass the dollar and potentially isolating the U.S. from emerging economic networks. The dollar’s role as the world’s reserve currency has long given the U.S. substantial economic and geopolitical leverage. If global trade begins shifting toward alternative systems, this dominance could erode, leading to declining demand for the dollar and increased volatility in currency markets.

For U.S. banks, heavily reliant on dollar-based transactions, reduced global dollar demand could hurt profitability and weaken the financial sector, which has already faced significant challenges since 2020. Analysts also caution that alienating major economies like China, India, and Brazil could have broader consequences for American trade and diplomacy.