Geopolitical Economy Report Trump's tariffs turbocharge de-dollarization: World sells US dollar assets, seeking alternatives
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May 4, 2025 Donald Trump's tariffs are backfiring, accelerating the global shift away from the U.S. dollar. Countries, particularly in BRICS, are selling off U.S. assets, seeking alternatives like gold and European bonds. Tensions are rising in East Asia as alliances between China, South Korea, and Japan strengthen amid U.S. trade threats. The fallout from these trade wars is shaking confidence in U.S. Treasury securities, paving the way for a multipolar currency world. The implications for U.S. economic policy and its financial markets are profound.
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Trump's Tariffs Accelerate De-dollarization
- Donald Trump's aggressive tariffs and trade war have accelerated the decline of the US dollar's global dominance.
- Threatening countries with 100% tariffs ironically pushed them away from the dollar, fueling de-dollarization.
Financial Institutions Join De-dollarization
- Financial institutions, not just countries, are selling US assets due to lost confidence in US policies.
- Trump's administration policies encourage de-dollarization by weaponizing dollar liquidity.
China-Vietnam Strengthen Partnership
- Trump's tariffs on Vietnam backfired when China deepened ties with Vietnam on over 40 agreements.
- Instead of isolating China, tariffs pushed regional powers to cooperate more closely against US pressure.