Trump’s policy is undermining the role of the US dollar as a global reserve currency as global markets and major economies seek alternatives, financial experts warn.
Trump’s policy burns a global shift from the US dollar
Nigel Green, CEO of financial advisory firm Devere Group, warns that US President Donald Trump’s policies are accelerating a global shift from the dollar. Green explained that the dollar’s domination was “shakeable and rigorously tested” as Trump’s aggressive trade policies, diplomatic conflicts and economic interventions undermined US confidence in the currency. He said on March 6:
The dollar has long been an anchor in global finance, but Trump’s actions have erod confidence at an astounding pace. The world sees the United States turn inwards with protectionism, trade wars and volatile diplomacy.
The market response is already visible, with the dollar falling four months. Despite Trump’s claim that tariffs “make America stronger,” Green warned that “the world is trying to isolate itself.” He points to the major economies that will advance alternative trade settlements, highlighting: The euro has gained traction in reserves. “He added: “The once thought derailment appears to be happening at an accelerated pace, and Trump is passing it to the world for all the reasons that will continue.”
Trump’s foreign policy decision is that allies will also move away from the US dollar. His conflict with Ukrainian President Voldymi Zelensky and his threat to cut military aid have sent shockwaves throughout Europe. Green emphasized that “credibility drives currency strength,” and argued that Trump’s policies “think twice, spark a trade war and create massive instability.” Countries like France and the UK are now considering greater military and economic independence. His dramatic moves, including the establishment of Elon Musk-led Government Efficiency (DOGE), have made investors even more unstable, Green noting, adding, “Is investors driven by a sound financial strategy or driven by impulsive political decisions?”
Furthermore, Trump’s escalating trade war, which extends tariffs beyond China to allies like Canada and Mexico, has accelerated the restructuring of global trade and declining confidence in the dollar.
Devere executives explained that a low dollar could lead to increased borrowing costs, increased inflation and reduced US impact on global markets. The Bank of England and other major financial institutions have flagged the growing risks associated with Trump’s trade policy. Investors have already made adjustments and are shifting capital to other currencies such as the euro, Swiss franc and yen. Green concluded:
Investors and institutions are already in coordination. The dollar’s status as a safe haven’t been eliminated overnight, but Trump’s actions light up the fuse.
