The BRICS alliance was hellbent on kick-starting the de-dollarization agenda until the 16th summit in Russia’s Kazan region. Things have now taken a U-turn as the bloc members are slowly backtracking on the initiative. The US dollar was seen as the main villain of the global economy where local currencies were kept at its mercy.
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The agenda to break free from the clutches of the US dollar ignited the de-dollarization process started by the BRICS bloc. After Trump reclaimed the White House, talks about using the US dollar for trade are growing among member nations. Trump vowed to introduce a 100% tariff on all goods coming into the US for countries that denounce the USD.
If the tariff comes into effect, the financial discrepancies could hit the BRICS alliance harder than thought. Their import and export sector will take the first hit leading to losses by paying up extra in taxes. This could make BRICS rethink their strategies as de-dollarization could only harm their native economies.
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BRICS Slowly Backtracking on De-Dollarization
BRICS member India was the first to publicly reject the de-dollarization agenda kick-started by the bloc. The Foreign Minister of India, S. Jaishankar confirmed that the country is not interested in the de-dollarization process. He revealed that India will use local currencies only when the option to not settle trade in the US dollar arises. “We have never actively targeted the US dollar. That’s not part of our economic, political, or strategic policy,” he said.
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In addition, BRICS member Russia is also slowly backtracking on the de-dollarization process after Trump’s victory. Putin called the USD a “pillar of US power.” He added, “Our proposals are not aimed against [the] dollar. This is simply us rising to the challenge of modern times, in response towards the development of the economy we are thinking.”
