Former US President Donald Trump’s economic advisers are considering ways to actively prevent other countries from shifting from the dollar to other currencies. This was revealed by multiple people familiar with the situation. This is an effort to counter the movement among major emerging countries to reduce their exposure to the dollar.
Penalties for allies and adversaries that seek to find aggressive ways to conduct bilateral trade in currencies other than the dollar are also being considered, with options including export restrictions, pursuit of suspected currency manipulation, and tariffs. , the people involved spoke on condition of anonymity.
Opposition to the dollar’s dominance in the global financial system intensified in the wake of the US-led move to impose harsh economic sanctions on Russia, a member of the Group of 20 (G20), in 2022. Approximately 2,500 targeted Russian central bank and government officials had their access to dollars restricted.
US President Biden this week to help rebuild Ukraine Signed a bill giving the president new powers to seize Russian dollar assets. The so-called REPO (Russian Establishment, Proxy Powers, and Oligarchs) clause was added to the national security package to support countries such as Ukraine. The move has raised concerns among many Republicans, who say it could undermine the dollar’s role in the global financial system.
Brazil, Russia, India, China and South Africa, known as BRICS, discussed de-dollarization at a summit in August last year.The group’s member countries include major oil producing countries Saudi Arabia and the United Arab Emirates (UAE). His influence is increasing as he has announced that he will accept it. Saudi Arabia and the UAE have their currencies pegged to the dollar.
Economic advisers advising Trump and his campaign are discussing targeting such BRICS efforts if he returns. Mr. Trump himself has expressed publicly and privately his desire for the dollar to remain the world’s reserve currency.
“We will not allow the dollar to fall away.”
In an interview with CNBC on March 11, Trump said, “I don’t like countries moving away from the dollar. I won’t allow countries to move away from the dollar. Losing its role as a standard is like losing the War of Independence.” That’s a blow to our country.”
As president, Trump will support domestic manufacturing. We considered inducing a weaker dollar. But now, one person familiar with the matter says, Mr. Trump has said privately that there is currently no benefit to dollar intervention. The Trump campaign asked to see the most recent statements regarding the dollar on the morning of the 25th.
“Under a Biden administration, we will lose the dollar standard. It’s like losing our biggest war,” Trump said, accusing the Biden administration’s policies of damaging the dollar’s reputation. did.
Mr. Trump supports dollar stability and urges other countries to align with U.S. policy by refraining from intervening by devaluing their currencies. The dollar is trending higher as the prospect of a U.S. Federal Reserve interest rate cut recedes, and other countries’ monetary authorities are considering intervening to prop up their currencies rather than devalue them.
Authorities in Japan and South Korea have warned against excessive movements in exchange rates.
On the 25th, the yen hit its lowest level against the dollar since 1990. Chinese authorities are also taking steps to stem the fall in the yuan.
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Original title: Trump Aides Discuss Penalties for Nations That De-Dollarize (1) (excerpt)
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