Trump killing the US dollar has become a clear reality as the administration’s policies directly undermine the global reserve currency. Since January 2025, Trump’s team has implemented several measures threatening the dollar’s international status, with 58% of global foreign exchange reserves now at risk from this de-dollarization strategy.
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US Dollar Collapse, De-Dollarization, and What It Means for You
Trump’s “Dutch Disease” Theory
Trump’s administration believes the dollar’s reserve status actually harms the US economy. Trump killing the US dollar appears deliberate, as key officials advance this theory. Vice President Vance has explicitly linked the dollar to Appalachia’s “resource curse.”
To be more precise, Steve Miran, chairman of Trump’s Council of Economic Advisers, was clear about the fact that:
“The reserve function of the dollar has caused persistent currency distortions that have saddled the US with unsustainable trade deficits.”
These financial security risks have already impacted markets, with the US dollar index dropping over 8% since January.
Markets Show Growing Alarm
A troubling pattern has emerged with rising bond yields and a falling dollar – suggesting investors are fleeing US assets amid US dollar collapse fears.
Ranjiv Mann, senior portfolio manager at AllianzGI, stated:
“Markets are increasingly nervous about US policy credibility, as seen in a rise in the term premium demanded by investors to own US Treasuries, as well as the downward pressure on the US dollar.”
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Deliberate Dollar Destruction Strategy
Trump killing the US dollar involves potential tools like taxes on foreign holdings of US securities, ownership limits, and possibly suspending Federal Reserve currency swap lines with major central banks.
David Lubin, Senior Research Fellow at the Global Economy and Finance Programme, warned:
“An abrupt deterioration of the dollar’s international status would sharply raise US borrowing costs, while offering China a much easier path to internationalising its own currency.”
How America is Affected
Because the dollar has lost its dominance, many people start to worry about inflation. Since the US budget deficit is greater than $1.8 trillion and accounts for 6.4% of its GDP, Americans will find it harder to afford imports and to buy everyday necessities.
The Future of The World’s Main Currency for Reserves
Although US dollars are being used less, there is no obvious replacement at this point. Vasso Ioannidou, who teaches at Bayes Business School, says there are several explanations for kids taking on more roles outside of education. At occasional times, some people prefer other currencies, but nowadays, this is only seen a little. Other countries are basically in a stage of evaluating their level of dependence on the US market. There has been an increase in people choosing to invest wisely to keep their investments safe. If the trend holds, the dollar will eventually lose its top spot among world currencies.
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With Trump’s new policies, the situation of global reserves could change which could threaten the world economy if the dollar becomes less important.