Contact us: info@strategic-culture.su

Donald Trump’s return to power is bringing his characteristic bluntness back to the global economic stage.

One of his first targets is the BRICS, an economic bloc founded by Brazil, Russia, India, China and South Africa and with news members including Saudi Arabia and the UAE that is mulling the creation of a currency to rival the US dollar’s dominance.

At first glance, Trump’s hardline dollar defense would appear to bolster its position as the global reserve currency, a role it has held since World War II.

But a closer look suggests that these tactics could backfire, driving countries like China to accelerate efforts to reduce their reliance on and holdings of the dollar.

Already wary of Washington’s willingness to use the dollar as a geopolitical weapon, China has spent the past decade laying the groundwork for an alternative financial future.

It’s aggressively promoted the international use of its yuan through bilateral trade agreements and expanded partnerships under its Belt and Road Initiative.

Additionally, China’s central bank has been diversifying its foreign reserves, shifting away from dollar-denominated assets to gold and other currencies.

For Beijing, Trump’s rhetoric is not a deterrent—it’s a call to action. Trump’s preference for tariffs and sanctions as tools of economic diplomacy has already had unintended consequences.

The aggressive use of these measures over the years has deepened mistrust among America’s trade partners and adversaries alike. By turning the dollar into a weapon, the US inadvertently pushes nations to seek alternatives.

The creation of a BRICS currency, while still a distant and logistically challenging proposition, is emblematic of a broad collective desire to build financial systems that are less susceptible to American influence.

Trump’s threats may stall or complicate such efforts in the short term, but they also validate the fears driving these initiatives—that the US wields its economic power with little regard for the long-term stability of the global financial order.

For China, this isn’t just about dollars and cents; it’s about securing its position as a global superpower. A multipolar financial system would reduce its vulnerability to US economic pressure, giving Beijing greater freedom to pursue its strategic objectives.

China’s digital yuan experiment—the world’s most advanced central bank digital currency project—is part of this broader ambition. If successful, it could offer an alternative to dollar-dominated cross-border payment systems, particularly in emerging markets.

The irony of Trump’s strategy is that it accelerates the very trends he’s supposedly trying to combat. By doubling down on tariffs and sanctions, he reinforces the perception that the US is an unreliable steward of the global financial system.

This perception doesn’t just affect adversaries like China and Russia; it also resonates with allies in Europe and Asia, many of whom have voiced concerns about over-reliance on the dollar.

Efforts like the European Union’s push for greater use of the euro in energy trade are a testament to this growing unease.

Ultimately, the dollar’s dominance relies on trust – trust that the US will act as a responsible leader of the global economy and trust that dollar-denominated assets will remain stable and accessible.

By weaponizing the dollar, Trump risks eroding that trust, not just among America’s adversaries but also its allies. And as that trust diminishes, so too will the dollar’s hold on its coveted reserve currency status.

Original article: Asia Times