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China Reacts to Trump’s BRICS Threat.
China has rebuked the United States for destabilizing global finance and leveraging the dollar’s dominance as a geopolitical weapon, following President-elect Donald Trump’s threat to impose tariffs on BRICS nations pursuing de-dollarization efforts.
“The U.S. has long used its dollar hegemony to shift crises, spread U.S. inflation to other parts of the world, and made it become a geopolitical tool, which damages international economic and financial stability, and disrupts international order,” Liu Pengyu, spokesperson of the Chinese Embassy in the U.S., told Newsweek.
He contrasted this with BRICS, which he said would continue to promote economic cooperation and a financial system that is “more inclusive and just.”
Newsweek reached out to a spokesperson for Trump with an emailed request for comment.
BRICS—originally comprising Brazil, Russia, India, China, and South Africa—accounts for a substantial portion of global economic growth. The grouping represents more than 40 percent of the global population and 31.5 percent of the world’s GDP in purchasing power parity terms, compared to the G7’s 30 percent, according to a 2023 report by U.K. economic research company Acorn Macro Consulting.
BRICS expanded in 2023, adding Ethiopia, Egypt, Iran, and the United Arab Emirates. Saudi Arabia has also been invited but has not yet formally joined the group. Argentina declined the invitation.
Though the bloc lacks a shared currency, some in the U.S. view its efforts to develop alternative financial systems and reduce reliance on the dollar for trade as a long-term strategic challenge.
Trump on Saturday fired a warning shot on his X (formerly Twitter) and Truth Social accounts.
“The idea that the BRICS countries are trying to move away from the dollar while we stand by and watch is over,” Trump wrote. He vowed to impose 100 percent tariffs on BRICS nations unless they committed to abandoning plans for a shared currency or any alternative to the U.S. dollar.
Many analysts remain skeptical about BRICS’ ability to displace the dollar.
Earlier this year, Washington, D.C.-based think tank the Atlantic Council said that the dollar accounts for 58 percent of global foreign exchange reserves, compared to the euro’s 20 percent. Despite Beijing’s push for broader use of the Chinese yuan, that currency commanded only 2.3 percent as of late 2023, down from a peak of 2.8 percent the previous year.
Trump launched the ongoing trade war against China during his first term, citing unfair trade practices.
During his election campaign, he pledged to impose a 60-percent blanket tariff on Chinese goods. Last week, he threatened an additional 10 percent tariff on Chinese exports and a 25 percent tariff on goods from Mexico and Canada unless the flow of the opioid fentanyl into the United States is stopped.
(Bellingham herald)