The current president-elect, Donald Trump, is leaving no stone unturned to bolster the US dollar. Trump is ready to put in efforts, planning strategic tariff cuts and reductions to ensure that countries diligently continue to support the US regency. But in an alternate scenario, Trump’s overprotective streak when it comes to the US dollar may backfire, ultimately leading the dollar to invite trouble. Here’s how it all may unravel.
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Donald Trump and His Grandiose US Dollar Protection Plans
The US dollar is currently a trending topic within the Trump leadership. Trump has unveiled massive plans to protect the US dollar, primarily through the deployment of extensive tariffs on nations moving away from the dollar.
In one of his earlier interviews, the president-elect unveiled plans to impose tariffs on nations, particularly the BRICS bloc, who have reportedly been planning on ditching the US dollar in the long haul.
“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.”
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In one of his recent tweets, Trump shared how these tariffs may play a pivotal role under his leadership, touting them as instrumental when it comes to paying the hefty American debt.
“The tariffs, and tariffs alone, created this vast wealth for our country. Then we switched over to income tax. We were never so wealthy as during this period. Tariffs will pay off our debt and MAKE AMERICA WEALTHY AGAIN!”
AI Predicts The Odds Of US Dollar Weakening Under Trump
Trump’s tariff ordeals have been vastly criticized, with the majority of analysts quoting it as a disaster in the works.
“The dollar remains dominant for several reasons: the USD is the most liquid currency in the world, trades freely, and it is also the lending currency of the world.” If Trump increases the pressure on BRICS, it may well accelerate a move away from the dollar.” said Rodrigo Catril, a strategist at National Australia Bank Ltd. in Sydney.
Brad Setser, senior fellow at the Council on Foreign Relations and a former US Treasury official during Barack Obama’s presidency, shared how the Trump tariff ordeal “doesn’t look good in the long haul.”
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“It isn’t a good look; it indirectly elevates the stature of a non-threat and suggests a lack of confidence in the dollar,” he said.
As per GPT, the odds of the US dollar weakening are hinging at 40% to 50%. The AI referred to Trump’s earlier rule, stating how it was a mix of aggressive tax stimulus, tax cuts, and trade tensions. This development ultimately led the dollar to encounter friction across the board.
