Rattled by U.S. President-elect Donald Trump’s 100% tariff threat, South Africa has dismissed as false reports that the BRICS economic bloc is planning to create its own currency. In a statement, the Department of International Relations and Cooperation (DIRCO) blamed “recent misreporting” for feeding a narrative that the BRICS alliance wants to replace the U.S. dollar as the main currency of trade between members.

The remarks by the department follow Trump’s post on the social media platform X, warning BRICS members against attempting to create the greenback’s rival. In the post, Trump, who is set to be inaugurated on Jan. 20, 2025, demanded a commitment from BRICS countries that they will neither create a new currency “nor back any other currency to replace the mighty U.S. dollar.”

In addition to the 100% tariff threat, Trump warned the BRICS member countries they will lose access to the U.S. market. However, batting away Trump’s claims, the South African government insisted that discussions within BRICS are focused on trading among member countries using their own national currencies.

“South Africa supports the increased use of national currencies in international trade and financial transactions to mitigate the impact of foreign exchange fluctuations, rather than focusing on de-dollarisation,” the department said.

The department added that the strengthening of correspondent banking networks and the development of infrastructure for settlements in national currencies helps further this goal.

Although South Africa is one of the BRICS bloc’s key members, it still conducts significant trade with the United States. In fact, South Africa is one of 32 sub-Saharan African countries eligible for preferential access to the U.S. market under the African Growth and Opportunity Act (AGOA). Observers in South Africa, including the head of the central bank, believe it is vitally important for the country to stay in AGOA as well as maintain cordial relations with the U.S.

In May 2023, allegations by the then U.S. Ambassador to South Africa, Rueben Brigety, that the country had supplied Russia with weapons to aid its war effort in Ukraine caused the local currency to plunge to a new all-time low. At the time, many feared the fallout between Washington and Pretoria could lead to South Africa, which denied the allegations, losing access to AGOA, dealing a serious blow to its economy. An internal investigation later absolved South Africa of any wrongdoing.

Besides his ominous warning to BRICS members, Trump vowed to hit Canada, China, and Mexico with new tariffs on “day one.” Trump explained that the action will be retaliation for the three countries’ failure to block the flow of drugs and illegal immigrants into the United States. Similarly, Trump’s threat prompted an immediate response, which came in the form of the Canadian Prime Minister Justin Trudeau’s unscheduled visit to the United States.

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