Tariffs are a good concept, but the United States needs to be careful with how they use them. The Fed has gone from around 9.4 four trillion dollars on their balance sheet, and they've dumped about two trillion dollars worth of treasuries over the last 3 years. They've got to get those bonds out of their holdings because they're not they're not effective. However, there’s still around 7.4 trillion left on the balance sheet. That’s literally hurting the GDP.
President-elect Donald Trump has threatened to slap a 100% tariff on the BRICS nations if they try to abandon the United States dollar as the reserve currency. Is it realistic for the BRICS countries to completely move away from the dollar? Not completely. When BRICS started in the original formation of the 5 countries, they were utilizing theU.S. dollar in 100% of transactions. Local currency was very minimal on international trade. Today, they're doing 65% of all their transactions in local currencies. But on the international stage, there's still less than 1/3 of the dollar usage by the BRICS members. Donald Trump is going to come in and he's going to negotiate these tariffs. It's going to be surgical. Does that mean BRICS can take over the dollar reserve status? Not in the near future, but they are backing their new BRICS currency with gold, and that has created a lot more credibility.
