Republican presidential nominee Donald Trump has claimed that dumping the US dollar will be extremely costly for foreign countries which pursue the policy, adding that they will face unprecedented import taxes for pursuing non-dollar trade.
Speaking to his supporters during a campaign rally in Wisconsin on Saturday, the former US president pledged to maintain the status of the greenback as the world’s reserve currency, emphasizing that it is “under major siege” as a growing number of states have been turning to other ways of settling trades.
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“You leave the dollar and you’re not doing business with the US, because we are going to put a 100% tariff on your goods” Trump said.
A broad trend towards using national currencies instead of the greenback has gained momentum following the massive economic restrictions introduced against Russia by the US and its allies in the wake of the escalation of the Ukrainian conflict in February 2022. After being cut off from the Western financial system, Moscow has turned to alternative options for settlement, with some of Russia’s foreign partners following suit.
Last week, Russian President Vladimir Putin said that Russia hadn’t been pursuing a de-dollarization policy, but was forced to look for other options after a series of unprecedented measures, including Russia’s central bank being cut off from dollar transactions, a ban on the transfer of US banknotes to the country, and the freezing of the country’s forex reserves.
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According to Putin, Moscow and its BRICS partners are now using national currencies in 65% of mutual trade settlements.
Members of the Association of Southeast Asian Nations (ASEAN) have been planning to discuss a shift to settlements in local currencies instead of the US dollar, euro, yen and pound sterling. The combined GDP of the economic bloc, which includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, reportedly amounts to $4 trillion.
Last week, the presidential candidate pledged to substantially reduce the use of sanctions by Washington if he is reelected in November. Speaking at the Economic Club of New York, Trump acknowledged that the curbs imposed by the US on other states are damaging for the dollar.