Although we are just two months into the year, geopolitical tension has reached a fever pitch. With the United States adopting an aggressive economic policy, a host of nations are concerned over a brewing trade war. However, it could work out in their favor, as BRICS may be in trouble with experts projecting a potential tariff-driven US dollar surge.
Under the direction of US President Donald Trump, the nation is enacting a host of tariffs through new policy. Indeed, it is not only BRICS, as Mexico and Canada have suffered from the new administration’s effort to balance trade. In turn, it could have a positive effect on the US dollar.
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BRICS and Global Market Could See US Dollar Enjoy Tariff-Driven Surge
Since his return to the White House, Donald Trump has sought to do away with decorum and delicacy. In an effort to balance the nation’s international standing, Trump had adopted increased import taxes on a host of countries. The question is, will it pay off?
The answer could surprise many. Indeed, BRICS may be in trouble as experts project a ‘tariff-drive’ US dollar surge in the near future. If it does take place, it could see the President rewarded for his policy and ensure the reserve status of the greenback, something that Trump has focused on since his return.
Also Read: BRICS: US to Forge Trade Deal as New Nation Fears Tariff Threat
According to Goldman Sachs analysts, the US dollar could increase from protectionist trade policies. Moreover, the movement could make the asset even more attractive to currency traders, experts state.
The bank states that entities that take long positions in the US dollar will see increased profits as tariffs strengthen its appeal. This could be dangerous for the BRICS group. Not only does it reinforce increased tariffs, but it reverses the work they’ve done in the last several years to de-dollarize global markets.
