US presidential candidate Donald Trump has issued an open threat to countries around the world. During a rally in Wisconsin state, Trump said that if you are leaving the dollar, then forget about trading with the United States of America because we will impose 100 percent tariff on you. This statement of Trump is being considered an attack on the BRICS countries, who want to make some other currency an international currency in place of the dollar. Apart from the BRICS countries, there are many other countries who think of bypassing the dollar during mutual trade.
Trump, who had a protectionist attitude with the policy of ‘America First’ during his previous tenure, said during the rally that the dollar has been the victim of a major siege in the last eight years, de-dollarization was also discussed in a group conference last year. Trump said that I want the dollar to remain the reserve currency of the world and I am ready to do anything for this work. According to the IMF, the US currency still accounts for 59 percent of the foreign exchange reserves in the first quarter of 2024, while the euro is in second place with about 20 percent.
Is this an alarm bell for India?
Donald Trump is seen as a pro-India president. However, India also suffered losses due to the protectionist policies implemented during Trump’s previous tenure. Even though the direct tariff war was between China and the US, Indian companies also suffered losses. India is a part of the BRICS group, which talks about de-dollarization. India also constantly wishes to do its trade in its own rupee by separating it from the dollar. During the Ukraine war, whatever trade India has done with Russia has been done through currency exchange or in some other currency. Apart from this, India is a big importer of crude oil, we have improved our relations with many countries including Saudi and have carried forward trade with those countries in our currency.
Apart from this, the Reserve Bank of India also wants to establish Indian UPI in place of the US payment system SWIFT. Therefore, this threat of Trump is also being linked to India, because if Trump does this, then it is sure to affect India’s trade. Apart from India, other countries also want to end their dependence on the dollar, Saudi Arabia, China and Russia have proved to be the biggest players in this.
The world’s confidence in America’s economy has been shaken
Actually, the growing voice of protest against the dollar across the world has troubled America. Trump has given this statement only after discussing with his economic advisors. Trump or any American President would not want to let the dominance of the dollar diminish over the world, because if this happens, their influence over the world will be reduced. The US economy benefits greatly from the dollar being a global currency. This makes it easier for America to get loans. America issues its bonds every year and borrows currency from the people. This makes it easier for the US economy to continue growing. Japan has bought bonds worth about $1 trillion of America, while China has bought bonds worth about $750 billion, but looking at the economic condition of America for the last few years, people want to make some other currency the new international currency instead of the dollar. China’s Yuan is at the forefront in this race.
