President Donald Trump’s recent announcement of a 50% tariff on India, set to take effect in 21 days due to its purchase of Russian oil, is a strategic move to reinforce the dominance of the U.S. dollar and counter the BRICS coalition’s efforts to explore alternative currency systems. The BRICS nations—Brazil, Russia, India, China, South Africa, and newer members like Egypt, Ethiopia, Iran, and the UAE—have discussed reducing reliance on the dollar in global trade, with proposals for a common payment system or even a shared currency. Trump’s tariff policy, including the specific targeting of India, aims to deter these nations from pursuing de-dollarization by imposing severe economic penalties, making it costly for them to challenge the U.S. dollar’s role as the world’s primary reserve currency. By singling out India, a key BRICS member and major U.S. trading partner with $191.8 billion in goods-and-services trade in 2022, Trump sends a clear message that any move toward a BRICS currency or alternative financial system will result in restricted access to the lucrative U.S. market.

India’s cautious stance on de-dollarization, as articulated by External Affairs Minister S. Jaishankar, who has expressed skepticism about a BRICS currency due to the need for significant policy alignment among members, makes it a complex target for Trump’s tariffs. The 50% tariff, which builds on a previous 25% levy for India’s oil purchases from Russia, pressures New Delhi to prioritize its strong trade relationship with the U.S. over BRICS initiatives that might align with China and Russia’s push for a multipolar financial system. India’s reliance on the dollar for its trade and financial transactions, coupled with its wariness of China’s growing influence within BRICS, suggests that Trump’s tariffs are designed to exploit these tensions, discouraging India from supporting a BRICS currency. Economic analyses, such as those from the Peterson Institute for International Economics, warn that such high tariffs could lead to slower GDP growth and higher inflation globally, but for India, the immediate threat of losing market access in the U.S. could outweigh the long-term appeal of BRICS financial reforms.

The broader context of Trump’s tariff strategy reveals a concerted effort to maintain U.S. financial hegemony by leveraging economic coercion against BRICS nations. His repeated threats of 100% tariffs on countries pursuing a BRICS currency, combined with the specific 50% tariff on India, underscore a policy of punishing any perceived “anti-American” moves, such as reducing dollar dependency. While the BRICS group has not yet developed a viable alternative currency—Brazil’s President Lula has called for gradual steps, and experts deem a BRICS currency unlikely in the near term—Trump’s actions aim to preemptively stifle these discussions. For India, the tariffs create a delicate balancing act: maintaining its BRICS membership while avoiding economic fallout from U.S. trade penalties. By raising costs for Indian exports, Trump’s policy not only seeks to deter de-dollarization but also encourages India to negotiate bilaterally with the U.S., potentially weakening BRICS cohesion and reinforcing the dollar’s global dominance.