In recent comments, Russian President Vladimir Putin weighed in on the escalating tension between BRICS nations and the US, following President-elect Donald Trump’s threats of imposing 100% tariffs on countries that cut ties with the US dollar. Putin, addressing the issue, took aim at the diminishing power of the US dollar in the global economy, suggesting that the US no longer holds the same sway it once did.
Putin’s remarks shed light on the growing sentiment within BRICS (Brazil, Russia, India, China, and South Africa) to reduce reliance on the US dollar in favor of local currencies. According to Putin, the influence of the dollar has been diminishing, a trend accelerated by sanctions and the weaponization of the US currency. As emerging economies have flourished, the once-dominant power of the US dollar has steadily waned, leading to the rise of alternative economic systems.
The Decline of the US Dollar’s Dominance
Putin didn’t hold back in his criticism, stating that the US’s share in the global economy is shrinking, which naturally diminishes the dollar’s influence on global financial processes. The Russian President attributed this shift to both political and economic decisions made by US leadership over recent years. He pointed to actions that undermined the dollar’s role as a global reserve currency, which is traditionally central to international trade and finance.
“It’s been four years since the US President-elect was in the White House,” Putin remarked. “During this time, the economy has undergone many changes, both globally and in America. His political opponents have done a great deal to undermine the fundamental role of the dollar.” This statement encapsulates the underlying sentiment shared by many within BRICS: that the US’s economic power is no longer what it once was.
BRICS Push for Local Currency Dominance
As BRICS nations continue to strengthen their economic ties, the bloc has increasingly focused on using their own local currencies for trade. This move aims to sideline the US dollar, which has long been the dominant currency in international commerce. The bloc’s efforts to boost the use of local currencies reflect a broader strategy to mitigate the risks posed by dollar dependence and reduce vulnerability to US-led sanctions.
With the US dollar’s global influence weakening, BRICS countries are positioning themselves to play a more prominent role in global trade using their respective currencies. This pivot is seen as a natural response to the US’s declining global influence and its use of the dollar as a geopolitical tool.
The Impact on the US Economy
If BRICS continues to reduce its reliance on the US dollar, several key sectors in the US economy could face significant consequences. The dollar’s current dominance in global trade benefits various industries, particularly those involved in finance, technology, and energy. A shift away from the dollar could lead to a decrease in demand for US-based financial products, a drop in the dollar’s value, and potential long-term economic challenges for industries heavily tied to dollar-based transactions.
As BRICS pushes forward with its plan to reduce dependency on the dollar, the global economic landscape could see substantial changes. How the US responds to these developments, particularly to Trump’s tariff threats, remains to be seen, but one thing is clear: the era of the US dollar’s unchallenged dominance may soon be over.
Also Read: Bitcoin, Not BRICS, Poses Biggest Threat to US Dollar Dominance, Says Economist Siegel
In conclusion, as BRICS nations continue to expand their influence and reduce their reliance on the US dollar, the global economy is poised for a transformation. The decline in the US dollar’s dominance marks a significant shift in the balance of power, and it remains to be seen how this will reshape the future of international trade and finance.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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