The president-elect of the United States, Donald Trump, has vowed to end de-dollarization. Trump has shared his grand plans on how he may impose tariffs on nations, making it harder for them to ditch the US dollar. At the same time, Trump may also streamline policies that may fuel the surge of greenback, which, in turn, is also lethal for the US in one way.
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Trump USD Policies Could Further Push The Nations Away
The US dollar has gained immense momentum after the US elections crowned Donald Trump as the new president of the US. Trump’s crowning as the 47th president of the US is crucial in many ways. For instance, Trump is ready to explore innovative methods to boost the greenback, which includes the establishment of the DOGE department headed by Musk. The aforementioned department will be responsible for meticulous financial planning and budgeting, which may help the US come out of its depressive economic state.
At the same time, Trump has made certain bold statements about protecting the dollar. He shared how he may impose tariffs on other nations that are pivoting away from the dollar in hopes of keeping the integrity of the dollar intact.
However, Trump’s plan may backfire, as it may make the US dollar expensive for other countries to transact with. The greenback gaining strength might be good for the US, but for other nations, it may become a problem worth ditching as its overvaluation may compel nations to search for alternatives.
In simpler words, the dollar’s surge would make it an unaffordable currency to trade with, expediting de-dollarization narratives around the world.
“A stronger USD would weaken its role as reserve currency,” economists at Allianz, an international financial services firm, wrote in a June 29 report. “If access to USD becomes more expensive, borrowers will search for alternatives.”
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Alliances Like BRICS Continue To Search For Alternative Currencies
The rising US dollar strength may spell trouble for global emerging economies. In this wake, Brazilian President Luiz Inácio Lula da Silva had earlier shared how it’s important to construct alternative currency mediums to tackle the aforementioned issue at hand.
“Why can’t we do trade based on our currencies?” he said, per The Financial Times. “Who was it that decided that the dollar was the currency after the disappearance of the gold standard?”
Similarly, the alliance has expedited efforts to ditch the USD by introducing plans to launch a comprehensive currency system challenging the USD’s prestige.
“Trump’s America-first policies are expected to drive up the value of the dollar compared to its global counterparts, as was already on display the day following his historic election win on November 5 as China’s yuan, Russia’s ruble, Brazil’s real, India’s rupee, and South Africa’s rand all fell. This could in turn push these BRICS member nations to look for new paths to move away from the US dollar.” As stated by Nasdaq
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