Trump De-dollarisation Accelerant

By Jomo Kwame Sundaram  

KUALA LUMPUR, Malaysia, Jan 6 2026 (IPS) - While US President Donald Trump has blamed the BRICS and foreign investors for de-dollarisation, his rhetoric, actions and policy measures are mainly responsible for the trend’s recent acceleration.

Threats and reactions

Although Trump is not the sole cause of de-dollarisation, which began much earlier, well before he became president, his recent initiatives have accelerated the trend.

Despite some temporary reversals, the dollar’s post-World War II role as world reserve currency has gradually declined over the decades, especially since the 1970s. Ben Norton has argued that several Trump measures have accelerated this trend.

Trump claims his supposedly ‘reciprocal tariffs’ will reduce the US trade or current account deficit with the rest of the world. But if countries cannot export to the US, they cannot earn dollars to meet their trade and investment needs.

Many believe Trump’s tariffs and other threats are enhancing US leverage vis-à-vis others, but their reactions, including defensive countermeasures, are accelerating de-dollarisation.

Trump’s measures, such as his insistence on bilateral negotiations, have alarmed most nations, including long-time allies. As nations, including allies, rethink their economic relations with and vulnerability to the US, de-dollarisation inadvertently accelerates.

Trump vs the Fed

The US Federal Reserve Bank’s overnight lending or funds rate has been higher since 2022, responding to higher consumer price inflation following the pandemic and the Russian invasion of Ukraine.

As the Fed raised interest rates, yields on US government debt rose. But Trump now wants the Fed to cut interest rates to reduce the high debt servicing costs of both the government and private corporations.

In 2024, the US federal government paid about 3% of GDP in debt interest alone. Although such debt exceeds 120% of GDP, debt service costs are deemed manageable as long as interest rates remain low.

Trump’s pressures on the Fed to cut interest rates have inadvertently undermined investor confidence and prompted ‘flights [from dollar assets] to safety’.

Trump’s recent campaign against his earlier Fed chair appointee, Jerome Powell, has inadvertently raised investor concerns about his espoused monetary policy priorities.

Inflation fears persist

Investors now worry that Trump is pressuring the Fed to cut interest rates. They believe this will stoke inflation and cause the dollar to fall against other major currencies. As Trump is seen forcing down interest rates, he risks being blamed for persistent inflation.

If the Fed buys US Treasuries to reduce yields, for a new round of ‘quantitative easing’ (QE), dollar asset investments will realise lower, if not negative, real yields.

Although inflation hawks’ worst fears of higher inflation have not materialised so far, few believe tariffs will not raise inflation.

Expecting Trump 2.0 to impose more tariffs, many US companies stockpiled imports before April 2. As tariffs took effect and stocks declined, prices rose.

Many investors have sold their dollar assets as monetary authorities worldwide seek alternatives to the greenback. Such sell-offs lower the dollar’s value, further spurring de-dollarisation.

Trump now wants to lower US Treasury bond yields as foreign governments and investors seek alternatives to holding dollar assets.

Many are considering switching to non-dollar assets despite stagnation tendencies elsewhere in the Global North, especially in Europe and Japan. If investors stop buying dollar assets or sell them to purchase non-dollar assets, de-dollarisation will gain momentum.

Foreign demand falling

Washington is understandably worried that foreign investors will dump Treasury securities. In 2015, a third was held by foreigners, but this has since fallen to under a quarter.

The ‘Mar-A-Lago Accord’ proposal, which requires foreign governments to hold US Treasury ‘century bonds’ for 100 years despite assured losses, will compound resentment.

Lowering Treasury bond yields is both risky and difficult due to the highly financialised US economy. Past bond market turmoil has triggered stock market selloffs, lowering Treasury yields, share prices and tax revenue.

Government and corporate borrowing costs rise together. As trillions of dollars’ worth of corporate bonds mature over the next two years, high interest rates will raise corporations’ borrowing costs. Many want to refinance at lower interest rates.

These efforts to bring down interest rates are apparent to all. But lower interest rates and negative ‘actual yields’ for Treasury securities will ensure high inflation persists.

De-dollarisation accelerating?

Trump’s actions, especially threats of tariffs and sanctions, have elicited diverse reactions, often undermining dollar hegemony and accelerating de-dollarisation.

Many recent developments have undermined public confidence in the US government and the rule of law, accelerating de-dollarisation.

As investors sold US assets in mid-2025, the dollar saw its biggest fall since the 1973 oil price hike. It fell by over 10% against other major currencies, triggering temporary falls in the prices of many financial assets, including equities and bonds.

Since then, there has been increased capital market uncertainty and volatility, as in the US bond market, although a strong rally followed the ensuing stock market crash.

In many recent episodes of financial volatility, dollar liquidity was considered the safe option. But in 2025, confidence in dollar assets fell, prompting selloffs and de-dollarisation.

Thus far, Trump has been adept at managing short-term volatility, but his style implies no one knows when the music will stop.

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• Weaponizing Free Trade Agreements

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• What’s different about Trump’s tariffs?

• Trump’s Trade War in Perspective

Available online here: Trump De-dollarisation Accelerant

Trump Reboots US National Security Strategy, Foreign Policy

By Jomo Kwame Sundaram  and Kuhaneetha Bai Kalaicelvan

KUALA LUMPUR, Malaysia, Dec 16 2025 (IPS) - The new US National Security Strategy (NSS) repositions the superpower’s role in the world. Hence, foreign policy will be mainly driven by considerations of ‘making America great again’ (MAGA).

Changing course

The new NSS no longer presumes US world leadership and alliances based on values. It breaks with earlier post-Cold War foreign policy, upsetting those committed to its sovereigntist unipolar world.

Quietly released on December 4, it is certainly not an easily forgettable update of long-established positions, cloaked in obscure bureaucratic and diplomatic parlance.

Mainly drafted under the leadership of ‘neo-con’ Secretary of State and National Security Adviser Marco Rubio, it is already seen as the most significant document of Trump 2.0.

It asserts, “The days of the United States propping up the entire world order like Atlas are over.” Instead, foreign policy should now prioritise advancing US interests.

New priorities

The NSS implies the US will no longer be the world’s policeman. Instead, it will exercise power selectively, prioritising transactional rather than strategic considerations.

It emphasises economic strength as key to national security, rebuilding industrial capacity, securing supply chains and ensuring the US never relies on others for critical materials.

Even if the Supreme Court overrules the President’s tariffs, the US has already secured many concessions from governments fearful of their likely adverse impacts.

The NSS is ostensibly based on MAGA considerations involving immigration control, hemispheric dominance, and cultural ethno-chauvinism.

Mainstream commentators complain it lacks the supposedly enlightened values underlying foreign policy in the US-dominated world order after the Second World War.

They complain the new NSS is narrow in focus, redefining interests, and sharing power. Its stance and tone are said to be more 19th-century than 21st-century.

Besides pragmatic imperatives, mixed messages may be due to unsatisfactory compromises among rival factions in Trump’s administration.

MAGA foreign policy

Long-term observers see the NSS as unprecedented and blatantly ideological.

White supremacist ideology influences not only national cultural politics but also foreign policy. The NSS unapologetically promotes Judaeo-Christian chauvinism despite the constitutional separation of church from state.

MAGA’s ‘America First’ priority is evident throughout. Border security is crucial as immigration is deemed the primary national security concern.

For Samuel Huntington, immigration threatens the US by making it less WASP (White Anglo-Saxon Protestant).

The NSS blames social and economic breakdown on immigration. Inflows into the Western Hemisphere, not just the US, must be urgently stopped by all available means.

Ironically, the US has long been a nation of immigrants, with relatively more immigrants than any European country. Its non-white numbers are almost equal to whites.

Trump’s neocolonial interpretation of the 1823 Monroe Doctrine emphasises the Americas as the new foreign policy priority.

Foreign rivals must not be allowed to acquire strategic assets, ports, mines, or infrastructure in Latin America and the Caribbean, mainly to keep China out.

Trump’s NSS prioritises the Western Hemisphere, with Asia second. Africa receives three paragraphs, primarily for its minerals.

Europe is downgraded to third, due to its ostensible immigration-induced civilizational decline. Surprisingly, the NSS urges halting North Atlantic Treaty Organisation (NATO) expansion.

China near peer!

The NSS policy on China is widely viewed as unexpectedly restrained. China remains a priority, but is no longer its primary antagonist; it is now a peer competitor.

Now, the US must rebalance its economic relationship with China based on mutually beneficial reciprocity, fairness, and the resurgence of US manufacturing.

The US will continue to work with allies to limit China’s growth and technological progress. However, China is allowed to develop green technologies due to US disinterest.

Meanwhile, US hawks have ensured a military ‘overmatch’ for Taiwan. The NSS emphasises Taiwan’s centrality to Indo-Pacific security and world chip production.

The NSS warns China would gain access to the Second Island Chain if it captured Taiwan, reshaping regional power and threatening vital US trade routes.

With allied support, the US military will seek to contain China within the First Island Chain. However, Taiwan fears US support will wane after TSMC chip production moves to the US.

The NSS expects the ‘Quad’ of the US, Australia, Japan and India to enhance Indo-Pacific security. For Washington, only India can balance China in Asia, and is hence crucial to contain China in the long term.

Regional reordering

The NSS also downgrades the Middle East (ME). Conditions that once made the region important have changed.

The ME’s importance stemmed from its petroleum and Western guilt over Israel. Now, the US has become a significant oil and gas exporter.

Critically, the US strike on Iran in mid-2025 is believed to have set back Tehran’s nuclear programme.

The ME seems unlikely to continue to drive US strategic planning as it has over the last half-century. For the US, the region is now expected to be a major investor.

As US foreign policy is redefined, the world worries. The ME has been downgraded as Latin America has become the new frontline region.

Much has happened in less than a year of Trump 2.0, with little clear or consistent pattern of continuity or change from his first term. But policies have also been quickly reversed or revised.

While the NSS is undoubtedly important and indicative, it would be presumptuous to think it will actually determine policy over the next three years, or even in the very near future.

Related IPS Articles

• World Must Pay to Make America Great Again

• A New Non-Alignment for the Global South

• Trump Accord Sows Discord in US Empire

• Trump’s ‘Shock and Awe’ Tariffs

• America First Deepens World Stagnation

• New Geopolitics Worse for Global South

• IPEF: Much Ado about Nothing

• Weaponizing Free Trade Agreements

• ‘Populist’ Macroeconomic Policy

Available online at: Trump Reboots US National Security Strategy, Foreign Policy

World Must Pay to Make America Great Again

By Jomo Kwame Sundaram 

MANILA, Philippines, Nov 11 2025 (IPS) - US President Trump’s economic strategy for his second term aims to get the rest of the world, especially its wealthy allies with greater means, to pay more to help strengthen the US economy.

Recent US initiatives have undoubtedly accelerated de-dollarisation but these have largely been unavoidable consequences of its own actions rather than due to any conspiracy by others to that end.

De-dollarisation distraction

Harvard economist Kenneth Rogoff recently observed, “We are absolutely at the biggest inflection point in the global currency system since the Nixon shock to end the last vestige of the gold standard.”

After the Bretton Woods Conference in 1944, the gold price was set at $35 per ounce. In August 1971, US President Richard Nixon ended this gold-dollar parity.

De-dollarisation has gradually continued since, with occasional brief spurts and reversals. For example, capital flows abroad rose following the 2008-09 global financial crisis.

Growing weaponisation of economic relations has probably accelerated de-dollarisation. Rogoff observed, “this was happening for a decade before Trump. Trump is an accelerant.”

Governments, central banks and BRICS countries have been de-dollarising. Even US dollar hegemony advocates no longer deny alternatives to the dollar’s role as global reserve currency.

Meanwhile, private foreign investors, including foreign asset managers, investment banks and pension funds, do not want to be left behind.

Investment fund managers are increasingly ‘de-risking’ by cutting exposure to dollar-denominated assets.

Mar-a-Lago plan

Economist Stephen Miran has proposed a new Trump initiative to require other governments to pay the US for services purportedly rendered.

First appointed chair of Trump’s Council of Economic Advisers, Miran has since been appointed to the US Federal Reserve Board.

A few days after Trump announced his Liberation Day tariffs on April 2, Miran articulated five expectations. These expect other nations to pay the US for ‘public goods’ services it ostensibly provides the world.

Allies will be expected to pay the US more for the ‘security umbrella’ it provides to NATO and other allies. The US also expects those buying Treasury bonds to pay more for the ‘privilege’

In November 2024, Miran’s A User’s Guide to Restructuring the Global Trading System proposed the Mar-A-Lago accord, named for Trump’s exclusive Florida island resort and residence.

He also referred to the Plaza Accord, which the Reagan administration imposed on its G5 allies in September 1985. Then, the US forced Japan and Germany to appreciate their currencies against the dollar.

The yen’s appreciation fuelled a massive Japanese asset price bubble that burst with devastating consequences in 1989, ending its post-war boom.

Trump now seeks the appreciation of other major currencies. Already, he has succeeded in getting his European allies to agree.

However, it seems unlikely that Trump will get China and other BRICS economies to do so, as they are aware of how the Plaza Accord affected Japan.

Century bonds

Other national monetary authorities buying US Treasury bonds to stabilise their own currencies have long caused dollar appreciation.

They are now expected to help depreciate the dollar. Miran has proposed that the US issue century, i.e., 100-year bonds, at very low interest rates, well below the current rates for US Treasury securities.

Miran wants foreign central bank reserve currency managers to sell off their dollar-denominated assets. They should “term out” their “remaining reserve holdings” and refinance short-term debt with long-term borrowings.

Miran is explicit: “The US Treasury can effectively buy duration back from the market and replace that borrowing with century bonds sold to the foreign official sector.”

His plan thus intends to force foreign holders of US government debt (‘Treasuries’) to extend the duration of their loans.

Very low interest rates for century bonds will ensure that foreign bondholders effectively pay the US more for the ‘privilege’ of borrowing dollars.

For Miran, the appreciation of other currencies against the dollar will also strengthen the American economy. US manufacturing will strengthen as its exports become more competitive.

Thus, his Mar-A-Lago accord plan expects other nations to pay more to strengthen the world’s largest and richest economy.

Miran’s Mar-A-Lago plan is not yet official US policy. However, this can change with Miran’s likely appointment as the next Fed chair, replacing Trump 1.0 appointee Jerome Powell.

BRICS de-dollarisation?

However, Miran’s declared plan to strengthen the US economy by depreciating the dollar against other major currencies has also accelerated de-dollarisation.

In recent years, the BRICS have been accused of conspiring to accelerate de-dollarisation worldwide, but this is certainly not a shared ambition.

Lacking significant trade surpluses, Brazil and South Africa have long advocated de-dollarisation. But Russia’s complaints have more to do with recent NATO weaponisation of financial instruments against it.

There is no comparable enthusiasm among other BRICS member states, which have much healthier trade surpluses and more dollar assets.

Its recent membership expansion will make an official BRICS de-dollarisation stance even more unlikely.

Nevertheless, Trump’s leadership relies on the American public believing the rest of the world is conspiring against them.

Available online at: World Must Pay to Make America Great Again