After the customs duties raid .. Did the people of the dollar be aware of it?
The US dollar still constitutes the cornerstone of the global financial system, but its continuous hegemony has become a growing conflict within the United States itself, which is a lot of amazement.
The opposition to the superiority of the dollar does not come from China seeking to expand the influence of its national currency, nor from the euro countries, the second most powerful international currency, but from within the American administration itself, and at the head of the protesters on the power of the dollar, Vice President J. Vance.
The recent economic developments, especially the “raid” of the customs duties launched by President Donald Trump on international trade, contributed to feeding the internal American controversy over the future of the dollar and its position as a global backup currency.
Despite Trump’s statements, in which he stressed that the dollar will remain the first reference currency in the world, its administration is witnessing a hot discussion on whether it must be reduced by the global role of the dollar, or the relentless pursuit to preserve its hegemony.
According to the data of the International Monetary Fund, the dollar’s share of foreign exchange reserves fell to 57.4% in the third quarter of 2024, its lowest level since 1995, compared to a rate of approximately 70% in 2000.
On the other hand, the euro maintained its stability at the limits of 20%, while the unconventional currencies such as the Australian, Canadian and Chinese dollar, and the Chinese ranminbeic, witnessed a steady growth in its shares combined..
Banking expert Jerry Glider believes that the common explanations linking the dollar’s decline to a possible economic slowdown in the United States, or with a decrease in the flow of capital towards the US economy, are not enough.
In his opinion, there are deeper reasons, related to an increasing conviction within the American administration, that the dollar’s position as a global backup currency has turned from a strategic advantage to an economic burden on the United States.
“There is a rooted vision in the decision -making circles that the excessive dollar strength is similar to the phenomenon of” Dutch disease “that the Netherlands witnessed in the 1960s, when excessive dependence on natural gas exports led to the rise in the local currency, which undermined the competitiveness of the rest of the sectors, especially the industry, according to Jalder, to Al -Eqtisadiah.
Indeed, the high global demand for the dollar as a safe haven contributed to raising its value to exaggerated levels against most other currencies, which made foreign goods cheaper than their American counterparts. As a result, the percentage of employment in the American industrial sector decreased from 24% in 1974 to only 8% in 2024.
But on the opposite side, there are still strong voices defending the maintenance of the dollar, led by Treasury Secretary, Scott Pinst, the most prominent defender of the “strong dollar”.
The vision shares Dr. Fiona Ethan, a professor of international economy, who warns that any undermining the global dollar status may push the international monetary system towards unprecedented chaos since President Nixon separated the dollar from gold half a century ago.
“If the dollar can no longer rely as a total transfer currency or as a safe haven in times of crisis, then the global financial system will enter a stage of severe mystery,” Ethan told Al -Eqtisadia.
She added, “The sudden collapse of the dollar’s position may lead to a significant increase in the cost of American borrowing, and will open the way for China to accelerate the internationalization of the yuan, the last thing the United States wants, especially in light of the current administration.”
In the end, the world remains anticipated by the hot discussions in the American corridors about the future of the dollar. Until this battle is resolved, the dollar will remain the strongest and most acceptable currency in the world.
