Trump's Ultimatum to BRICS: "Use Dollar or Face 100% Tariffs" – A Global Trade War Begins?

 

By Today Latest News Update India | January 13, 2026

​Editor’s Note: The battle for the global reserve currency has intensified. US President Donald Trump has issued a severe warning to the BRICS alliance, threatening economic isolation if they proceed with a rival currency. This report examines the stakes for India and the world.

​"Use the Dollar or Else": Trump’s 100% Tariff Threat

​The geopolitical temperature has hit a boiling point after President Donald Trump issued a direct threat to the BRICS alliance (Brazil, Russia, India, China, and South Africa). In a move to protect the dominance of the US Dollar, Trump declared that any nation attempting to create or support a replacement currency would face 100% tariffs on their exports to the United States.

​1. The Core Conflict: De-Dollarization

​For years, BRICS nations have discussed reducing their reliance on the US Dollar to shield themselves from Western sanctions.

• ​The Plan: Reports suggest BRICS is exploring a "basket currency" or digital alternative to bypass the Dollar in international trade.
• ​Trump’s Reaction: Viewing this as a direct attack on American economic power, Trump stated, "We require a commitment... that they will neither create a new BRICS currency nor back any other currency to replace the mighty U.S. Dollar."

​2. What This Means for India

​India finds itself in a delicate position within this economic crossfire.

• ​Strategic Autonomy: While India supports trade in local currencies (like the Rupee-Rouble or Rupee-Dirham mechanisms), Prime Minister Modi has clarified that India is not strictly "anti-West" or "anti-Dollar."
• ​The Impact: A 100% tariff on Indian goods (like textiles, pharmaceuticals, and tech services) entering the US would be catastrophic. Analysts believe India will likely play the role of a mediator, pushing for currency diversity without explicitly challenging the Dollar's supremacy.

​3. Global Economic Shockwaves

​Economists warn that if Trump follows through with this threat, it could trigger a global recession.

• ​Supply Chain Collapse: If goods from China and India become double the price due to tariffs, inflation in the US will skyrocket.
• ​The "Vassal State" Connection: This connects back to French President Macron’s recent warning about "Vassal States." Europe and the Global South are increasingly wary of Washington weaponizing its currency to dictate global policy.

​Conclusion: A High-Stakes Gamble

​Donald Trump’s "America First" approach is now testing the resilience of the BRICS alliance. 2026 is shaping up to be the year where the fate of the US Dollar—and the structure of global trade—will be decided. The question remains: Will BRICS back down, or will this accelerate the very de-dollarization Trump fears? 

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