In the face of Donald Trump’s threats to charge tariffs on countries that try to abandon the dollar for international trade, Russian State Duma Vice President Alexander Babakov said such an application “was unlikely.”
Trump issued this warning earlier this month, directing his words primarily to the countries that make up the BRICS, the regional bloc led by Russia and China that has been pushing the de-dollarization plan.
In an opinion article published in the Russian media Iz, Babakov assured that, although the threat of tariffs by the United States is theoretically possibleits implementation is “unlikely.”
The official thinks this is so because the high interdependence that exists between the economies of the United States and several of the BRICS countries. He cites as possible obstacles the alternative payment systems that the regional bloc is developing, and the expected internal opposition in the United States.
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“It is obvious that sanctions of this level against China, India and Brazil will inevitably damage the US economy itself in strategic sectors such as electronics, raw materials and agricultural products,” he said.
Babakov thinks that if Trump applies up to 100% tariffs to countries that support de-dollarization – as he warned -, BRICS may respond with similar restrictions.
Such an event would lead not only to a tariff war between the US and the countries that support de-dollarizationbut it would also generate a rising prices of consumer goods within the United States.
«Inflation and political pressure on the Trump administration would accelerate. And the new president of the United States at the beginning of his term only needs victories,” Babakov said.
With his threat, Trump seeks to stop the BRICS plans to create a single currency for international trade, which was announced at the beginning of this year. This is a new currency that was expected to be introduced at the summit which was carried out last October and which, according to Babakov, is not necessary.
According to the deputy chairman of the State Duma, there is no need for a new currency. Above all, if we take into account the advances that have been made in the use of other systems that are already leading the BRICS towards de-dollarization. Among them, he cites the use of local currencies, central bank digital currencies and crypto assets.
The BRICS are already creating a multilateral digital platform, BRICS Bridge, which is based on the central bank digital currency (CBDC) system of the participating countries. It will significantly simplify and speed up international payments, reduce transaction costs, eliminate intermediaries and appeal to developing economies.
Alexander Babakov, Deputy Chairman of the State Duma.
At this point, the official recalls the progress of CBDC projects such as the digital ruble, the digital yuan and Brazil’s DREX.
As CriptoNoticias has reported, in addition to BRICS Bridgethe new payment system includes tools such as BRICS Pay, the Financial Transfer Message System (SPFS), and a stablecoin: the Common Account Unit (Unir), which would be backed by gold.
There is no need for the BRICS single currency
With all these tools, the BRICS believe that a single currency would not be necessary, project that for the moment “is not viable”“, such as declared the Kremlin spokesmanDmitri Peskov, just one day after announcing Donald Trump’s victory in the United States.
These statements, added to those made by the president of Russia, Vladimir Putin, indicating that “they had no intention of leaving the dollar,” have led to the belief that the de-dollarization plans had been stopped. Above all, due to the expectation generated after the arrival of the new president in the US.
Putin indicated that the objective of the platform is “to increase investment flows to the BRICS countries.” Source: TASS.
Doubts also arose after India said its goal was not to leave the dollar. Indian Foreign Minister Subrahmanyam Jaishankar assured that the country not interested in dedollarizationand therefore they will continue to use the US dollar “wherever it is accepted as a form of payment.”
Despite this information, the deputy chairman of the State Duma denies that the process is paralyzedensuring that de-dollarization remains the goal of the BRICS and minimizing Trump’s warnings.
«The financial revolution in payment systems is happening right now and can no longer be stopped. The fact is that for this the BRICS countries do not even have to create a single currency: it is enough to launch a series of payment instruments at full capacity.
The dollar will continue to be a tool of political pressure
Alexander Babakov also took the opportunity to question the use of the dollar within global geopolitical strategy. A situation that does not expect it to change with Donald Trump.
«We see how the dollar has become an instrument of political pressure. “If the approaches to the world’s financial architecture are reviewed, the use of a payment system or currency for political purposes will be completely eliminated,” insists the Russian official. Hence he sees Trump’s threats as part of “a strategy of the American political elites that does not change.”
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