Trump explains strategy to prevent de-dollarization
Date
9/18/2024 8:30:02 AM
(MENAFN) Former President Donald Trump has unveiled a robust plan to combat the growing trend of de-dollarization, claiming that countries opting to abandon the United States dollar will face significant financial repercussions. During a campaign rally in Wisconsin on Saturday, Trump asserted that nations moving away from the dollar will incur hefty import taxes, specifically threatening a 100percent tariff on goods from those that cease conducting business in dollars.
Trump's remarks come at a time when the United States dollar's status as the world’s reserve currency is reportedly under threat. He noted that an increasing number of countries are exploring alternative currencies for trade settlements, a trend he believes undermines the dollar's dominance. "You leave the dollar and you’re not doing business with the United States," Trump emphasized, highlighting the potential costs of such a decision.
This shift away from the dollar has gained traction particularly after the United States and its allies imposed extensive economic sanctions on Russia following the escalation of the conflict in Ukraine in February 2022. Cut off from the Western financial system, Russia has sought alternative avenues for trade, prompting some of its international partners to consider similar moves.
Recently, Russian President Vladimir Putin remarked that while Russia had not actively pursued a policy of de-dollarization, the country was compelled to seek other options in response to the unprecedented sanctions imposed on it. These measures included the exclusion of Russia’s central bank from dollar transactions, a prohibition on the transfer of US banknotes into the country, and the freezing of its foreign exchange reserves.
Putin further noted that currently, Russia and its BRICS partners have begun using their national currencies for approximately 65percent of their mutual trade settlements, signifying a substantial shift in international economic relations.
As the landscape of global trade continues to evolve, Trump’s declaration reflects a defensive stance aimed at preserving the dollar’s preeminence in the face of rising competition from alternative currencies. His proposed tariffs represent a potential escalation in the battle for economic influence, reinforcing the importance of the dollar in international transactions.
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