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Trump’s assault on the global dollar

The difficulty is that, however unsatisfactory the hegemon might be, the alternatives look worse

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    • In the fourth quarter of last year, 58 per cent of global reserves were in dollars, down from 71 per cent in the first quarter of 1999, but far ahead of the euro’s 20 per cent.
    • In the fourth quarter of last year, 58 per cent of global reserves were in dollars, down from 71 per cent in the first quarter of 1999, but far ahead of the euro’s 20 per cent. PHOTO: AFP

    Martin Wolf

    Published Wed, May 21, 2025 · 05:00 PM

    IS THE dominance of the dollar about to fade away? Donald Trump insists that “if we lost the dollar as the world currency ... that would be the equivalent of losing a war”. Yet he himself could be the cause of such a loss.

    Reliance on a foreign currency depends on trust in its own soundness and liquidity. Trust in the dollar has been slowly eroding for a while. Now, under Trump, the US has become erratic, indifferent and even hostile: Why would one trust a country that has launched a trade war on allies?

    Yet, while outsiders might wish to diversify away from the dollar, they lack a compelling alternative. So, what, if anything, might replace its hegemony?

    US dollarGlobal economyDonald TrumpGlobal financial system

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