Donald Trump Will Protect The US Dollar

President-elect Donald Trump threatened a 100% tariff against the BRIC alliance of nations if they act to undermine the US Dollar. Much has been made about the BRIC alliance, a group of nations that seek to form an alternative to the US-led world order, attempting to weaken the power of the US dollar.

The US Dollar is the world’s reserve currency. This gives the US, which controls the flow of dollars, a privileged place. It means that other countries are more likely to by US debt, protecting the US from the ill effects of high deficits every year.

Having the Dollar as the Global Reserve Currency also allows the US to inflict heavy financial punishment on nations that do things America does not like. Withholding the flow of US Dollars to a country can severely hamstring a country’s economy.

It allows the US, as a single nation, to exert more influence than an entire continent in many areas. America’s ability to exert such influence makes it more likely that other nations will do what it wants.

Obviously, many nations that are in BRICS, especially China, Russia and Iran, do not like this. While the BRICS have varying interests, most seem to agree that they want to loosen America’s grip on the world. They would like to come up with an alternative currency to the US Dollar.

If not an alternative currency, which would be extremely difficult to create in a way that could rival the US Dollar, BRIC nations are planning to create zones of economic and financial cooperation to undermine the US Dollar.

While many have claimed that Donald Trump’s potential tariffs will raise prices for US consumers, and drive other nations away from the US Dollar, President-elect Trump has taken this notion head on.

On Friday, he tweeted that “The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER. 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.”

While 100% tariffs might be an exaggeration, especially on a country like China, there is no doubt, that if the BRIC nations did anything to significantly undermine the US Dollar, they would feel economic pain like they have never felt before from Trump.

In his first term in office, Donald Trump’s unpredictable, ferocious and swift actions kept our enemies largely in line. Of course, in the real world, nothing is cut and dry, including successes and setbacks on the world stage. But make no mistake; President-elect Donald Trump will protect the US Dollar.