BRICS Currency Debate: Implications of Trump's Tariff Threat

Donald Trump's threat of imposing 100% tariffs on BRICS countries for moving away from the US dollar remains uncertain in terms of execution due to legal ambiguities. Although BRICS seeks an alternative to the dollar, internal politics and economic differences hinder the progress towards a common currency.

Former RBI Governor Duvvuri Subbarao expressed skepticism about President-elect Donald Trump's warning of 100% tariffs on BRICS nations considering switching from the US dollar. Subbarao questioned the feasibility, citing potential legal hindrances in implementing such tariffs.

BRICS, comprised of countries such as India, Russia, China, and Brazil, is exploring alternatives to the US dollar. However, internal disagreements and economic complexities have hindered progress, with India notably distancing itself from this monetary shift.

Subbarao emphasized that despite China's efforts to internationalize its currency, the RMB, significant hurdles remain. India, on the other hand, continues to rely heavily on the US dollar for international trade, due to its limited global trade footprint and the need for investments in stable currencies.

(With inputs from agencies.)