Kenneth Rogoff, the American economist and Professor at Harvard University in Cambridge, Massachusetts, explained in a recent interview how the aggressive tactics of the US, including imposing sanctions on developing countries are strengthening de-dollarization around the world. The US is wielding the “dollar weapon” and instead of helping its economy, is destroying it, he said. America stands at the crosshairs of a massive economic shift that can realign the global financial sector.
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De-Dollarization Will Rise Whenever the US Gets Aggressive, Says Harvard Economist
The hegemony of the US dollar is being challenged due to the aggressive stance of the White House. If President Donald Trump continues with the threats, a day will not be far when de-dollarization becomes reality, he warned. He stressed that weaponizing the US dollar bears no fruit, except for the decline of its hegemony. If the US declares a financial war, it will be on the losing side, said the economist.
Rogoff explained that not just China, but even America’s closest allies in Europe, are considering de-dollarization. “Not only China but also Europe has already been expanding its own international financial systems and taking measures to trade outside the dollar system,” he said. “If the US declares an all-out financial war, these movements will accelerate dramatically.” Power could be distributed and not remain concentrated with the US if aggression increases.
He also criticized Trump’s foreign policy for threatening developing countries with tariffs and sanctions. All of these pave the way for de-dollarization to grow and change into a new form. “Trump’s recent aggressive use of tariffs and financial sanctions signals the beginning of the end of the ‘Pax Dollar’ era. Using them fully against China could lead to Chinese counterattacks and the expansion of alternative payment networks. This ultimately weakens the very foundation of that power in the long term.”