Are Nations Abandoning Their Historical Reliance on the US Dollar?

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... For the survey, alternative trade use is recorded as a binary variable. Finally, de-dollarization scores were calculated for each country, ranking them in descending order.

This revealed several trends of interest. Notably, France is rethinking dollar dependence the most, with a significant gold share of foreign reserves and active alternative currency trading. Additionally, Singapore and Brazil are moving away from the dollar mainly through trade agreements, while keeping gold reserves relatively low.

Beyond this, the picture is more mixed with Asian countries focusing more on changing trade; while in Europe, some countries build gold reserves and others stay tied to the dollar. ...

Seemingly there is a strategic realignment of reserves and trade practices toward greater balance. Gold's growing share in reserves and the rise of local currency trade deals are early signs of a broader recalibration of international finance structures. ...

... When Paula Comings, the head of currency sales for US Bancorp, talks to US importers, she increasingly hears the same message: Their foreign counterparties no longer want to be paid in dollars.

Instead, they ask for settlement in euros, Chinese renminbi, the Mexican peso and the Canadian dollar, looking to limit their exposure to further swings in the greenback.

"A lot of clients previously were reluctant because dollars were sacred in the eyes of the supplier," Comings said. "Now the vibe from overseas vendors seems to be, Just give us our currency.'"

While the dollar saw a brief boost amid the turmoil in the Middle East, the currency is still about 8% lower this year against a basket of other currencies. That followed a steep gain of 7% in the final quarter of 2024, according to a Bloomberg index. This volatility, which complicates pricing decisions and poses earnings risks, increasingly means the dollar is falling out of favor.

Some US Bank clients offer a glimpse into this trend. A lumber company from the Midwest now converts its US cash into euros before paying for hardwood imports from Europe -- a change from its previous practice of simply sending dollars. The move was spurred in part by a 2% discount offered by its European supplier for making payments in the single currency. ...

Thank-you, Pres Trump for introducing such uncertainty into the value of the US Dollar that corporations (countries) no longer seem to view it as the global benchmark currency it once was.

@#8 ... Surely it wouldn't have anything to do with the nearly $37 trillion in debt both Republicans and Democrats had a hand in racking up. ...

... and yet, Pres trump wants to significantly add to the debt, again.

Donald Trump Built a National Debt So Big (Even Before the Pandemic) That It'll Weigh Down the Economy for Years (January 2021)
www.propublica.org

... The "King of Debt" promised to reduce the national debt -- then his tax cuts made it surge. Add in the pandemic, and he oversaw the third-biggest deficit increase of any president. ...

Falling deeper into the red is the opposite of what Trump, the self-styled "King of Debt," said would happen if he became president. In a March 31, 2016, interview with Bob Woodward and Robert Costa of The Washington Post, Trump said he could pay down the national debt, then about $19 trillion, "over a period of eight years" by renegotiating trade deals and spurring economic growth.

After he took office, Trump predicted that economic growth created by the 2017 tax cut, combined with the proceeds from the tariffs he imposed on a wide range of goods from numerous countries, would help eliminate the budget deficit and let the U.S. begin to pay down its debt. On July 27, 2018, he told Sean Hannity of Fox News: "We have $21 trillion in debt. When this [the 2017 tax cut] really kicks in, we'll start paying off that debt like it's water." ...

@#11 ... Trump said he could pay down the national debt, then about $19 trillion, "over a period of eight years" by renegotiating trade deals and spurring economic growth.

After he took office, Trump predicted that economic growth created by the 2017 tax cut, combined with the proceeds from the tariffs he imposed on a wide range of goods from numerous countries, would help eliminate the budget deficit and let the U.S. begin to pay down its debt ...

Pres Trump and his supporters are saying a similar thing now.

Did it work back in Trump 1.0?

Will it work in Trump 2.0?