How an Upstart Global Payment System Led to Trump’s Latest Tariff Threat

Donald Trump’s recent tariff threat, promising 100% tariffs on countries moving away from the U.S. dollar, appears to have been influenced by a new blockchain-based payment system introduced by BRICS. The initiative, dubbed BRICS Pay, could challenge the dollar’s dominance in global financial messaging and payments.

BRICS Pay and the Challenge to Dollar-Dominated Networks

The BRICS coalition, consisting of countries like China, Russia, Brazil, and others, has unveiled BRICS Pay as an alternative to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the current global financial messaging system. The system aims to provide cross-border payments using national currencies, bypassing the dollar’s central role in international trade. This move is a direct response to the dominance of the dollar in global financial systems, with 88% of foreign exchange transactions involving the U.S. currency.

BRICS Pay was officially launched in October 2024 and offers a decentralized payment method, using digital payment technology and QR codes. The group has already expanded to include countries like Iran, Egypt, and Saudi Arabia, with plans to grow further. The goal is to provide a platform where businesses and citizens in BRICS countries can make global payments in their national currencies without relying on the dollar or SWIFT.

Trump’s Response and the ‘De-Dollarization’ Threat

In a recent social media post, President-elect Donald Trump targeted BRICS and its efforts, warning that any country that attempts to move away from the U.S. dollar would face 100% tariffs on goods sold to the U.S. Trump’s threat has been viewed as a response to BRICS Pay and the broader movement toward de-dollarization, which some countries see as a path to greater financial independence.

While the threat has sparked concerns about a potential trade war, the broader question is whether BRICS Pay can gain traction and challenge the dollar’s role in global finance. Some experts argue that BRICS Pay may be a more immediate concern than the creation of a BRICS currency, which remains a less certain prospect.

The Global Context and Potential Implications

BRICS Pay comes at a time when the West, particularly the U.S., has used the SWIFT system to impose economic sanctions, including on Russia, which has been banned from using the network since its invasion of Ukraine in 2022. The initiative from BRICS, which represents over one-third of the world’s area and nearly a quarter of global exports, is seen by many as an attempt to weaken the dollar’s grip on international trade.

While the idea of a unified BRICS currency is still speculative, the growing use of national currencies in trade within the group is a significant development. Some members of BRICS, including China, have long criticized the dollar for its role in global economic instability, and BRICS Pay is seen as a move toward reducing reliance on the U.S. currency.

What’s at Stake for the U.S. Economy

Trump’s tariff threat highlights the stakes in this evolving financial competition. By threatening to impose tariffs on countries adopting BRICS Pay, Trump aims to protect the dollar’s dominance and prevent any significant movement away from U.S. currency in global trade. However, experts remain uncertain about whether such a strategy will effectively curb the rise of alternative payment systems or whether it will escalate into broader trade conflicts.

For now, the situation remains fluid, with Trump’s team set to engage in negotiations with BRICS nations and other global powers to address the shifting financial dynamics. Whether the president-elect can successfully navigate this issue and protect the U.S. dollar remains to be seen.