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The Shifting Global Currency Landscape
While Trump endeavours to reinforce the supremacy of the US dollar, the wave of de-dollarization is ever-growing across the globe. This movement is becoming particularly prevalent among nations seeking alternatives to the dollar for international trade. So, can the de-dollarization agenda truly be halted anytime soon?
Trump Tightens His Tax Agenda
Recently, Trump announced a series of tax measures aimed at nations perceived to drift away from dollar reliance. He’s proposed a 10% tax on Canada and Mexico, citing reasons such as curbing illegal immigration and drug trafficking. Additionally, he’s set a 25% tariff on China, a move positioned as an attempt to reduce fentanyl imports.
Might these fiscal strategies reinforce the dollar’s position, or are alternative currencies simply inevitable?
These 2 Nations Have Moved Away From The Dollar
Iran and Russia are notable examples of nations actively distancing themselves from the US dollar. Iran’s central bank governor, Mohammad Reza Farzin, disclosed how Iran and Russia no longer use the dollar in trade. Instead, these two nations have opted for local currencies, namely the ruble and the rial.
How does this work, you ask? The financial authorities from both countries have settled on exchange rates for transactions, a system that appears to function smoothly. This approach is now responsible for conducting a whopping 96% of their trade in local currencies. According to Tass Media, the adoption of national currencies in transactions between Iran and Russia increased by 12.4% in 2024. So, what led to this pivotal shift?
The Rise of a Multipolar Currency Narrative
Indeed, the multipolar currency narrative is gaining momentum. Many nations, particularly within the BRICS and ASEAN blocs, suggest pivoting towards local currencies. This global trend could mark a gradual yet significant shift in how international trade is conducted in the future. For further context, why not check the World At War’s perspective?
Conclusion: The Future of the Dollar
As the world looks to local currencies, the de-dollarization agenda becomes harder to ignore. Trump’s tax policies might enforce the dollar in the short term, but could these changes withstand a global shift? It seems the world stage is set for an intriguing financial evolution.
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With the global currency landscape continually evolving, one can only wait to see how these strategies play out amidst shifting economic sands.
