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.

(See Jacob Jensen’s description of the BRICS process here.) The proximate cause of Trump’s threat is the development of BRICS Pay, which is intended to circumvent the dollar-dominated Society for Worldwide Interbank Financial Telecommunication (SWIFT) system that is used in 88 percent of foreign-exchange transactions and 54 percent of exports.

The fiscal profligacy of the United States, which has already produced debt equal to 100 percent of gross domestic product (GDP) and promises large deficits as far as the eye can see, has already focused attention on the potential for countries to lose their desire to hold Treasury securities and, more generally, to do transactions in dollars. While the loss of “reserve currency” status for the dollar is far from imminent, it is a concern that threatened tariffs will do nothing to address.

A more immediate cause for the BRICS initiative is the use of the SWIFT network to enforce economic sanctions, most recently against Russia after its invasion of Ukraine. Having a non-dollar alternative, like BRICS Pay, would make it more difficult to enforce restrictions on financial transactions that are at the heart of the sanctions. This appears to be the most immediate reason to threaten tariffs.

While it is easy to lose perspective among the myriad Trump tariff threats, this would be targeted at nearly half of the global population and GDP, so it is potentially a substantial global economic disruption. What exactly constitutes a satisfactory “commitment” remains unclear, as is the authority under which such tariffs would be levied. So, for now, it is just talk. But it is worth watching as the issue develops.