In an interview with Larry Kudlow, former President Donald Trump expressed his concerns about the decline of the U.S. dollar, both domestically and as the world’s reserve currency.
“Our country is going to hell and we’re not going to be the big bar,” Trump began. While his reference to infrastructure issues like crumbling airports, terminals, and roads painted a grim picture of the nation’s domestic condition, it was his discussion about the dollar that garnered attention.
Kudlow asked, “You want the dollar to remain the world’s reserve currency?
“Well, I think it’s bigger than losing any war!” Trump stated.
He pointed towards the possibility of other nations seeking alternatives to the U.S. dollar for international trade, hinting at China’s ambition to elevate the Yuan. “China wants to replace it with the Yuan,” Trump explained, “And it was unthinkable with us. Unthinkable. Would never have happened. Now people are thinking about it.”
There is a shared belief among experts that the dollar’s decline could impact U.S. trade balances, increase costs, and potentially limit the country’s ability to execute foreign policy. Trump’s warning hopefully serves as a catalyst for policymakers to take action to bolster the dollar’s global position.
Back in March, the Brazilian government announced that China and Brazil agreed to trade using their own currencies, bypassing the need for the US dollar as an intermediary. The move by Beijing represented another challenge to Biden, as well as the US dollar. China seeks to rival the US economically and is doing so more effectively with every passing fiscal year.
“The expectation is that this will reduce costs… promote even greater bilateral trade and facilitate investment,” the Brazilian Trade and Investment Promotion Agency (ApexBrasil) said.
The move aims to further challenge the dollar’s status and lead to greater use of alternative currencies for international trade. China has clear intentions to create a more multipolar world economy that is less reliant on the US dollar.
This isn’t the first time Trump has warned about the decline of the US dollar under the Biden administration either. After his arraignment in April, Trump spoke out about the state of the US dollar.
He explained, “Our currency is crashing and will soon no longer be the world standard, which will be our greatest defeat, frankly, in 200 years. There will be no defeat like that. That will take us away from being even a great power.”
The US dollar has clearly weakened under the Biden administration. Major currencies such as the Euro and the Chinese Yuan have begun to rival what used to be the strongest worldwide economic marker.