Amidst the BRICS bloc’s continued efforts to weaken the U.S. dollar, former President Donald Trump recently admitted that U.S. sanctions are damaging the currency. Trump also pledged to lift sanctions on Russia and Iran if he is re-elected in November, claiming that current policies are undermining the strength of the dollar.
BRICS’ Push for De-Dollarization
Over the past several years, BRICS (an economic alliance of Brazil, Russia, India, China, and South Africa) has increasingly distanced itself from the U.S. dollar. Since 2022, sanctions placed on Russia have driven Moscow to pursue more trade in local currencies. Moreover, the alliance has been working on instituting its own payment system as part of its broader effort to de-dollarize global transactions. The greenback remains the primary global reserve asset, but its dominance is being steadily challenged.
The Atlantic Council’s Dollar Dominance Meter shows that in 2024, the U.S. dollar’s share of global reserves fell to 58%, a notable drop as de-dollarization gains traction. BRICS continues to be a driving force behind this shift, and Trump’s recent comments underscore the ongoing challenge to the currency’s global dominance.
Trump’s Perspective on Sanctions and Dollar Dominance
Trump expressed concern about the long-term effects of sanctions on the U.S. dollar, saying they “ultimately kill your dollar and kill everything your dollar represents.” He reiterated the importance of maintaining the dollar’s global status, claiming that losing it as the world’s reserve currency would be akin to “losing a war.” While Trump acknowledged that sanctions are necessary for certain countries, he stressed the need to prevent major powers like Iran, China, and Russia from turning away from the U.S. dollar.
The former president’s stance adds another layer to the ongoing debate over the future of the U.S. dollar in a rapidly evolving global financial landscape.