Trump threatens '100% tariff' on nations ditching Dollar for trade
What's the story
Donald Trump, the Republican US presidential nominee, has issued a stern warning to countries considering abandoning the US Dollar for trade, according to Bloomberg.
At a campaign rally in Wisconsin, he stated that any nation shifting away from the US Dollar would face a 100% tariff on their goods.
This announcement adds another dimension to his already robust tariff policy.
Economic strategy
Tariff threat follows extensive economic discussions
Trump's tariff threat is the result of extensive discussions with his economic advisers.
The talks have been centered on developing strategies to penalize countries that actively pursue bilateral trade in currencies other than the Dollar.
Potential measures discussed include export controls, currency manipulation charges, and tariffs, according to sources familiar with these deliberations.
Currency defense
Trump defends Dollar amid global de-Dollarization talks
Trump, a known advocate of protectionist trade policies, expressed concerns about the Dollar being "under major siege" for eight years.
His comments come in the wake of discussions on de-dollarization among nations like India, China, Russia, Brazil, and South Africa at a summit last year.
Despite these talks and a decrease in Dollar dominance over recent decades, Trump remains committed to maintaining the US currency's status as the world's reserve currency.
Currency dominance
US Dollar still dominates official foreign-exchange reserves
Despite a decrease in its dominance, the US Dollar still accounted for 59% of official foreign-exchange reserves in Q1 2024, as per the International Monetary Fund (IMF).
The Euro trailed behind at nearly 20%.
Trump's tariff threat and his commitment to uphold the status of the US Dollar are significant elements of his campaign strategy in key swing states like Wisconsin.