Since 1971, the U. S. dollar has been the primary reserve currency, dominating global finance. This status allows the U. S. to borrow easily and exert significant financial influence worldwide. Recent U. S. policy, particularly under the Trump administration, aims to maintain this dominance against rising powers like China and Russia.
1. Dollar Decline: The dollar's share of global reserves dropped from over 70% in 2000 to below 60% recently, as countries diversify away from the U. S. dollar.
2. De-dollarization Trends: Nations are reducing dollar use in trade to avoid U. S. sanctions and monetary influence, spurred by the BRICS nations (Brazil, Russia, India, China, South Africa) considering a common currency potentially backed by gold.
3. Tariff Policies: President Trump has emphasized defending the dollar, threatening tariffs on countries engaging in currency alternatives to the dollar, reinforcing its role in trade and reserves.
4. Petrodollar System: The dollar's prominence is also tied to energy markets, particularly oil, which is mainly traded in U. S. dollars. Maintaining this system is crucial for sustaining dollar demand.
5. Economic and Military Impact: The dollar's strength lowers transaction costs and supports U. S. leadership in technology and finance. A weakening dollar could complicate military financing and reduce U. S. strategic capabilities.
The U. S. is focusing on defending its dollar dominance as a vital component of its economic strategy and national security. With challenges from emerging economies, U. S. policy aims to ensure that the dollar remains central to global finance and geopolitical influence. This effort, reflected in Trump's neo-Monroe Doctrine approach, underscores the broader implications of currency stability for U. S. power.
No comments:
Post a Comment