On Monday, US President Donald Trump declared that BRICS nations, including India, could face a 100% tariff on their trade with the United States. This move is expected to affect the trade relations between Washington and New Delhi significantly.

Trump's announcement came shortly after he took office as the 47th President of the United States. While signing executive orders at the Oval Office, he told reporters, "As a BRICS nation...they'll have a 100 per cent tariff if they so much as even think about doing what they thought, and therefore, they'll give it up immediately." He was referring to the BRICS nations reducing their use of the US dollar in global trade.

Trump clarified that his statement was not intended as a threat but as a firm position. He also disagreed with his predecessor, Joe Biden, who made remarks about the US being in a vulnerable position. Trump emphasised that America holds leverage over the BRICS nations. "If the BRICS nations want to do that, that's OK, but we're going to put at least a 100 per cent tariff on the business they do with the United States...It's not even a threat. In fact, since I made that statement, Biden said, they have us over a barrel. I said, no, we have them over a barrel. And there's no way they're going to be able to do that," Trump said.

Even before officially taking office as President, Trump had warned in December 2024 that he would impose a 100% tariff on BRICS nations. He stated that to avoid such tariffs, these countries must ensure they would not create a new currency to rival the US dollar.

“The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER,” Donald Trump wrote on his Truth Social network.

In response, India’s External Affairs Minister S. Jaishankar emphasised that New Delhi had "no interest" in undermining the US dollar. At the Doha Forum in December 2024, Jaishankar reflected on India’s positive relations with Trump’s first administration.

"There a personal relation between PM Modi and Trump...Where the BRICS remarks was concerned. We've always said that India has never been for de-dollarisation; right now there is no proposal to have a BRICS currency. The BRICS do discuss financial transactions...US is our largest trade partner, we have no interest in weakening the dollar at all," he stated.

The BRICS group comprises ten members: India, Russia, China, Brazil, South Africa, Egypt, Ethiopia, Iran, Indonesia, and the United Arab Emirates (UAE). These nations have been working towards reducing the dominance of the US dollar in global finance, with efforts to establish a new global currency.

It is worth noting that Trump and his economic advisers have been exploring ways to penalise both allies and adversaries who seek to challenge the dollar in bilateral trade. The US President has consistently emphasised his desire for the US dollar to remain the world’s primary reserve currency.

During a summit in 2023, BRICS nations discussed de-dollarisation after the growing resistance against the US dollar’s dominance, which was sparked in 2022 when the US-led efforts to impose economic sanctions on Russia. At the summit, Russian President Vladimir Putin urged BRICS countries to focus on expanding trade in their national currencies and enhancing cooperation between their banks.

On his first day in the White House, Donald Trump signed several executive orders, including reversing 78 orders implemented by former President Joe Biden. These orders spanned various topics, from immigration policies to regulatory freezes, and included a move to withdraw the US from the Paris climate agreement. Additionally, Trump mentioned his intention to impose a 25% tariff on Canada and Mexico by February 1.