The US dollar is currently one of the most important entities for the US, as the president-elect creates plans to protect its integrity. Donald Trump is upholding his strict stance towards the USD, adding how tariffs will play a major role if nations switch to other currencies by ditching the greenback. However, the real question remains, prompting global orders to ask whether the US dollar is truly irreplaceable or not.
Also Read: Ripple (XRP) & Dogecoin (DOGE) Price Prediction For Mid-December 2024
Trump Tariff Plans and Dollar Protection
The president-elect, Donald Trump, has made his stance clear through the latest X tweet. He shared how he will impose a 100% tariff on BRICS nations if they decide to work on an alternate currency, challenging the greenback’s integrity.
“The idea that the BRICS countries are trying to move away from the dollar while we stand by and watch is OVER. We require a commitment from these countries that they will neither create a new BRICS currency nor back any other currency to replace the mighty U.S. dollar, or they will face 100% tariffs and should expect to say goodbye to selling into the wonderful U.S. economy. They can go find another “sucker!” There is no chance that the BRICS will replace the U.S. dollar in international trade, and any country that tries should wave goodbye to America.”
While the threat is currently perceived as a major warning to BRICS nations, many analysts believe that the US dollar in reality can never be dethroned.
“Which currency would you want to own when global stock markets start to fall, and the global economy tends to head into recession? You want to be positioning in US dollars because that has historically been the exchange rate reaction to those kinds of events.” As stated by James Lord, the MS’s head of FX strategy for emerging markets
Also Read: Top 3 Cryptocurrencies That Could Rally Over 100% In December
The Real Agenda Of The Threats Issued By Trump
Another leading expert, Cindy Lau, head of fixed income at Avanda Investment Management Pte. in Singapore, shared how such threats are a reminder of how serious the president-elect is when it comes to protecting the US dollar.
“With regards to this specific threat, it doesn’t appear realistic, and the probability is low, but it serves as a good reminder that President-elect Trump wants to keep the US dollar as a reserve currency and is unlikely to proactively devalue the dollar. This also reaffirms our thinking that tariffs will be continually used as a threat in his term to serve his objectives and as a powerful bargaining tool.”
In response to this, the US dollar index has jumped, trading at 106 on the latest Trump tariff threat. This rally may extend as investors expect economic outperformance in light of recent events. As the USD surged, key currencies like the INR and Chinese Yuan took a dip amid the latest tariff threats blowing steam.
Also Read: Shiba Inu: You Could Have Made $103 Million With Just $1000