Former President Donald Trump’s economic advisers are considering ways to actively stop nations from shifting away from using the dollar — an effort to counter budding moves among key emerging markets to reduce exposure to the US currency, according to people familiar with the matter, Report informs referring to Bloomberg.
Discussions include penalties for allies or adversaries who seek active ways to engage in bilateral trade in currencies other than the dollar — with options including export controls, currency manipulation charges and tariffs, the people said, speaking on the condition of anonymity.
A verbal backlash against the dollar’s dominance in the global financial system gained traction in 2022, when the US led efforts to impose harsh economic sanctions on Russia, a Group of 20 nation. Russia’s central bank, government officials and some 2,500 other targets have had their access to the dollar restricted.
President Joe Biden this week signed into law a measure granting him new powers to seize Russian dollar assets to aid Ukraine’s reconstruction. The so-called REPO provision was added to a national security package to assist Kyiv and other US allies. The measure has sparked concern from many Republican lawmakers, who worry it will undermine the role of the US dollar in the global financial system.
Brazil, Russia, India, China and South Africa, together known as the BRICS nations, discussed de-dollarization at a summit last August. That group is gaining global heft after inviting key oil-producing nations Saudi Arabia and the United Arab Emirates, along with others in an expansion move this year. Saudi Arabia and the UAE currently peg their currencies to the dollar.
Economic advisers to Trump and his campaign have talked about targeting that particular BRICS effort in a potential second term. For his part, both publicly and privately, Trump has said that he wants the dollar to remain the world’s reserve currency.