Key facts:
The candidate reiterates that the dollar must remain the world’s reserve currency.
Economists believe that the measure will end up sinking the dollar, rather than benefiting it.
Republican presidential candidate Donald Trump is determined to put the brakes on de-dollarization. This is precisely when the dollar’s dominance as the global reserve currency is under threat as a result of geopolitical changes and efforts by China, Russia and their allies to end the dominance of the US currency.
“If you leave the dollar, you will not do business with the United States because we will impose a 100% tariff on your products,” Trump said in a rally on SaturdayWhat the candidate has in mind, so far, is to impose export controls, charges for currency manipulation and tariffs for any country that chooses a currency other than the dollar for bilateral trade.
Trump’s announcement comes at a time when dollarization is advancing at an accelerated pace, to the point that 92% of payments made in trade between Russia, China, India and Iran no longer use the dollaras previously reported by CriptoNoticias.
In the midst of this scenario, some analysts believe that the payment system being developed by the member countries of the BRICS alliance (Brazil, Russia, China, India, South Africa) and their allies will deal a severe blow to the US dollar. This is especially true given that the dollar is already affected by the growing per capita debt accumulated by the North American nation.
All this comes against a backdrop of growing global discontent towards the dominance of the dollar, especially following the sanctions imposed by the US on Russia in 2022. Since then, The number of countries showing interest in de-dollarizing their economies has increased.
Trump has repeatedly defended the dollar’s role as the world’s main reserve currency, warning that losing that position would be devastating for the US and comparing it to a major defeat. He has also expressed concern about China’s intentions to replace the dollar on the global stage, which could relegate the US to “second-tier” status.
Threat would further weaken dollar, analysts say
Former President Donald Trump’s threat to impose 100% tariffs on countries that abandon the US dollar would be damaging to both the United States and China, according to Hao Hong, economist at GROW Investment Group.
Hong warns that this policy could result in high inflation in the US and negatively affect Chinese exportswhich are already facing challenges. Other analysts have previously warned that such measures would have a negative impact on growth in both countries and could exacerbate global economic problems.
Commerzbank AG analyst Ulrich Leuchtmann has pointed out that Trump’s plan could cause major economic disruption and weaken the US currency, as it could incentivize more nations to move away from the US currency, putting its safe haven status at risk and causing a sharp weakness in the dollar.
While there have been calls in the past for a possible weakening of the dollar as a reserve currency, these have not materialised. Leuchtmann acknowledges that there are reasons to believe that the dollar could strengthen under a Trump presidency, but also highlights the complexity of making predictions based on political changes.
However, also Trump has criticized the use of sanctions, arguing that they weaken the dollar.ry harm the United States in its global competition, especially against countries like China.
“We are losing Iran, we are losing Russia. China is out there trying to make their currency the dominant currency. There is so much conflict with all these countries that we are going to lose the dominance of the dollar.”
Donald Trump, candidate for the presidency of the United States.
During an event in New York last week, Trump remembered who, although he imposed sanctions on Iran and North Korea when he was president, has always been reluctant to do so against Russia.
Predictions give Trump the win in the next elections
The threats and promises that Donald Trump is making will become reality if he wins the election, something that for now seems very likely if we take into account the predictions made by the public who bet on Polymarket, the most popular cryptocurrency prediction market currently.
Donald Trump has widened his lead over Kamala Harris, with 53% in his favor, compared to 47% for Harris. Just hours before the first debate between the two, which takes place just eight weeks before the election.
Trump has recently surged in predictions after suffering a temporary dip in his odds due to the announcement that Joe Biden would not seek re-election, which favored Harris. Even though Trump’s support has declined from a peak of 72% following the Bitcoin 2024 conference in July, he remains relevant.
It is now time to observe the impact that Trump’s new promises will have. This taking into account that the Republican candidate has been gaining support from the community that revolves around cryptocurrencies, which continues to wait and see whether or not Kamala will support the digital asset industry.