The world is witnessing a significant shift in the global financial landscape. As we step into 2025, traditional tactics like economic threats, sanctions, and reliance on a single dominant currency are proving less effective than they once were.
On his first day in office, newly sworn-in U.S. President Donald Trump threatened to impose a 100 percent tariff on BRICS nations if they continued their de-dollarization efforts. \"As a BRICS nation… they'll have a 100 percent tariff if they so much as even think about doing what they thought, and therefore they'll give it up immediately,\" he declared.
However, the global response indicates that such threats no longer carry the weight they once did. The Chinese Ministry of Foreign Affairs responded swiftly, emphasizing that BRICS is focused on fostering cooperation and shared prosperity, not confrontation.
Resilience in the Face of Sanctions
When Russia faced a barrage of Western sanctions in 2014 and again in 2022, many anticipated an economic collapse. Instead, Russia developed its own financial systems, insulating itself from external pressures. The creation of the System for Transfer of Financial Messages (SPFS) provided an alternative to the SWIFT network, while the Mir payment card system reduced dependence on global payment giants like Visa and Mastercard.
These initiatives not only stabilized Russia's economy but also paved the way for stronger financial ties with countries such as Türkiye, Kazakhstan, and nations in the Middle East, all without relying on Western-dominated systems.
Similarly, Türkiye faced restrictions from the U.S. on access to technology and equipment, including F-35 jets and armed unmanned aerial vehicles. In response, Türkiye invested in developing its own resources, producing this equipment domestically and even exporting to countries in the Middle East and Africa.
A Shift Towards a Multipolar World
The global inclination towards a more equitable world order is becoming increasingly evident. The G20 Summit in Brazil last year marked a historic moment, as the African Union participated as a full member for the first time. This inclusion signifies a broader vision for global cooperation beyond the traditional economic powerhouses.
BRICS nations are also redefining global trade by turning to their own currencies for commerce, thereby reducing dependence on the U.S. dollar. Agreements between Brazil and China to trade in their national currencies, and similar moves by India with its regional partners, highlight this trend. The BRICS New Development Bank is actively financing projects in local currencies, offering a fresh approach to international funding that doesn't rely on Western institutions. Moreover, efforts are underway to develop a BRICS blockchain-based payment system.
The Risks of Over-Reliance on a Single Currency
The move away from dollar dominance isn't just a political statement—it's a pragmatic decision. The global economy has felt the repercussions of over-reliance on the dollar through events like the 2008 financial crisis and the pandemic-induced global recession. These crises have underscored the risks associated with a single currency system, prompting nations to seek alternatives that offer greater economic stability and sovereignty.
As countries develop their own financial infrastructures and embrace multipolar cooperation, traditional threats like sanctions and tariffs are losing their effectiveness. The world's economic landscape is becoming more diverse, with nations forging new paths toward shared prosperity and resilience against external pressures.
The decline of threats and one-currency dominance signals a transformative period in global affairs. As nations continue to adapt and collaborate, the future points toward a more balanced and inclusive economic order.
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Why threats, sanctions and one-currency dominance are past their prime
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