US President Donald Trump has reaffirmed his warning to apply an extra 10 per cent tariff to all BRICS countries, including India, stating the bloc was intended to undermine the US dollar.
Addressing reporters at a Cabinet meeting on Tuesday, Trump stated, "Anybody that's in BRICS is getting a 10 per cent charge"—a claim that would apply to India even though it has a nuanced approach to the group.
Trump also hinted at a separate measure that could impact India’s economy directly—a 200 per cent tariff on pharmaceutical imports, although he noted the enforcement would be delayed. “We’ll give them a certain period of time to get their act together,” he said, offering a grace period of “about a year, year and a half” to pharmaceutical companies.
India, which shipped nearly $9 billion worth of pharmaceuticals to the US during the previous year, would be greatly impacted by this proposed change in policy.
In the same conversation, a reporter brought to mind Trump's previous comment on the coming trade deal with India and queried whether the tariff for BRICS would hold in such circumstances. Trump replied firmly: "Anybody that's in BRICS is paying a ten per cent charge. If they're a member of BRICS, they're gonna pay per cent tariff just for that alone, and they won't be a member for long."
India has blocked the proposed BRICS single currency, a step that would directly challenge the US dollar in global trade. Exercising what many analysts saw as a de facto veto, India effectively brought the initiative to a halt.
Elucidating New Delhi's stance, External Affairs Minister S. Jaishankar stated a few months ago, "I don't think there's any policy on our part to replace the dollar." He also reiterated the dollar's stabilizing influence on the world economy, observing, "At the end of the day, the dollar as the reserve currency is the source of international economic stability, and right now, what we want in the world is more economic stability, not less."
While a letter Trump issued Monday to South Africa, also a member of BRICS, promised a 30 per cent tariff next month, it did not mention any punitive measures aimed at BRICS membership. But on Tuesday, Trump said the BRICS tariff would come "soon."
In spite of India's opposition to the establishment of a BRICS currency, Trump continued to be convinced of a collective action within the group towards countering US economic hegemony.
"BRICS was created to hurt us. BRICS was created to debase our dollar and replace our dollar as the standard, remove it as the standard," he explained. Describing the possible ramifications, Trump continued, "And that's fine if they want to play the game, but I can play the game too."
He proceeded to underestimate the group's power, asserting, "BRICS is not, in my view, a serious arrangement." Trump intimated the bloc has lost unity, stating it had "largely dissolved" with only "a couple of nations lingering around."
He concluded with a stark warning about global currency leadership: “They want to destroy the dollar so that another country can take over and be the standard, and we’re not going to lose the standard.”
India's fears about a BRICS currency have revolved around suspicions that China may dominate and control such a financial tool to advance its own interests, something that has caused New Delhi to oppose any moves toward the establishment of a BRICS currency.
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