Will Trump’s Dollar Diplomacy Roil Global Trade?

Published On Dec 2, 2024, 7:58 AM

President-elect Donald Trump is pressuring BRICS nations (Brazil, Russia, India, China, South Africa) to continue using the U.S. dollar and not create an alternative currency, threatening a 100% tariff on them if they do. This stance comes as the dollar experiences a rally, potentially affecting global trade and inflation as investors react to Trump's proposed economic policies. Economists, however, see no immediate threat to the dollar's status as the global reserve currency.

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Trump's assertive stance regarding the dollar could create volatility in currency markets, especially with countries like Russia and China pushing for alternatives. Tariffs could disrupt trade, negatively impacting markets tied to international commerce. The potential for increased tariffs may lead to decreased foreign investment in the U.S., and rising inflation could hinder economic growth.

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