Donald Trump’s recent trade measures ensure more than just economic tensions. According to the Chinese academician Zheng Runyu, the new rates undermine the international position of the US dollar. His analysis makes clear: the aggressive trading policy of the US is hunting other countries towards cooperation and financial independence.
Dollar row under pressure
Runyu, affiliated with East China Normal University, draws hard conclusions in an interview with the Russian Medium Tass:
“The trade war that has been unleashed by the US is inextricably linked to maintaining their financial hegemony.”
According to Runyu, the US tries to maintain something impossible: combining the internal stability of the dollar with its international role. This leads to structural tensions.
In some cases, the latest tariff increases rise to 245% on Chinese import products. In addition to a reciprocal rate of 125%, additional levies are added due to, among other things, the Fentanyl crisis. Where many countries decided to negotiate, China opted for a direct confrontation, with the result that it is completely touched by these measures.
Zheng warns that this course is actually counterproductive for the US in the long term. “The hard approach with increasing rates will, if it persists or escalates, will ultimately only weaken the dollar.”
And this is ironic. Where Donald Trump continues to insist on a stronger United States, he seems to be shooting in his own foot with his trade war path. The DXY, the index that measures the power of the dollar, fell to the lowest level since April 2022. Almost all international currencies are currently gaining ground compared to the dollar.
Collaboration against the dollar
According to Zheng, American policy creates new opportunities for countries that want to dedollarize.
“Collaboration between China and Russia in the field of financial dedollarization, as well as within Brics, is more realistic than ever.”
Where such ideas used to be seen as hypothetically, they have suddenly become urgent due to the escalation of the trade war. BRICS has been committed to becoming less dependent on the dollar for some time. This is no secret. For example, bilateral trade has been carried out in local currency such as the Chinese Yuan and Brazilian Real. Trump’s trade war only seems to accelerate this process.
Zheng’s conclusion is clear: the American trade strategy, intended to strengthen the position of the American economy, could be the start of an accelerated end of the dominance of the dollar.
Source: https://newsbit.nl/trumps-handelsoorlog-versnelt-dedollarisering-zegt-chinese-expert/
