Trump Threatens to Impose 100% Tariffs on Countries That Abandon Dollar

JAKARTA – Republican presidential candidate Donald Trump unveiled a bold new strategy to preserve the U.S. dollar’s global dominance during a campaign rally in Wisconsin on Saturday. Trump vowed to impose 100% tariffs on goods from countries that no longer use the dollar for international trade.

“You leave the dollar and you don’t do business with the United States because we’re going to put a 100 percent tariff on your goods,” Trump said, underscoring his protectionist stance.

The statement follows lengthy discussions between Trump and his economic advisers, who have considered a range of measures to punish countries that trade currencies other than the dollar. These include export controls, accusations of currency manipulation and tariffs, as reported by Bloomberg News.

Maintaining dollar dominance is a key issue for Trump. The BRICS economic alliance of China, India, Brazil, Russia and South Africa is exploring de-dollarization.

This certainly adds urgency to Trump’s campaign economic message. While the dollar’s ​​dominance is slowly waning, it still accounted for 59% of official foreign exchange reserves as of early 2024, according to the International Monetary Fund (IMF). The euro is the next closest currency, accounting for nearly 20%, TOI reported.

In recent years, from Brazil to Southeast Asia, countries have called for trade to be conducted in currencies other than the US dollar.

Meanwhile, Partner and Chief Economist at GROW Investment Hao Hong assessed that the implementation of a 100% tariff would have an equally negative impact on the US and its biggest economic rival, China.

“Because China’s export sector is very competitive, it is a driving force in lowering global inflation,” Hong said as quoted by CNBC.

“If you put a 100% tariff on Chinese exports, for example, one can only imagine how high US inflation would be,” he said, adding that much of the US trade deficit would shift to allies such as Mexico and Canada.