De-Dollarization Isn’t Just Talk Anymore — The Numbers Are Showing It
President Donald Trump’s recent tariff policies are causing concerns around increasing de-dollarization and a potential weakening of the US dollar’s global dominance, according to Chinese financial analysts.
Also read: Trump Promises ‘Make America Wealthy Again’ — Will Tariffs & Tax Cuts Backfire?
These new policies are driving a change that could weaken the dollar’s role as the world’s primary reserve currency.
Trump’s Tariffs Drive Market Instability
Trump’s 2025 tariffs, which include a 25% duty on imports from Mexico and Canada and an additional 125% on Chinese goods, have triggered global market disruptions.
The US dollar fell more than 1% against major currencies on April 11, 2025, to a three-year low, down about 3 cents against the pound and 4 cents against the euro.
The tariffs are said to have weakened the dollar’s safe-haven status, with investors fighting against trade-related uncertainty.
Although Trump announced a 90-day delay on the majority of the tariffs, excluding those on China, retaliatory actions from trading partners have escalated tensions.
The tariffs are referred to as triggering a “day of anger” among allies, with markets showing continued concern. This volatility supported the argument about the dollar’s diminishing stability in global finance.
Also read: Oppenheimer Cuts Coinbase Forecast Amid Trump Tariff Fallout
De-Dollarization: A Global Shift Gains Speed
Financial analysts have suggested that Trump’s tariffs may speed up de-dollarization, reducing global reliance on the US dollar for trade and reserves, in line with the global economic shifts.
The IMF reports that the dollars held in foreign reserves around the world fell from over 70% in 2000 to below 60% by 2024, as central banks diversified into assets like gold and the Chinese renminbi (RMB).
Shift out of dollar reserves (Source: IMF)
With China being a key driver, the RMB surpassed the dollar in cross-border payment settlements by March 2023, accounting for 52.9% compared to 42.8% for the USD by March 2024, per Visual Capitalist.
China’s shift to expand the use of RMB, including digital yuan, further supports de-dollarization, though mainstream adoption is in the works.
Rise in non-traditional currencies (Source: IMF)
The former Treasury Secretary Lawrence H. Summers warned that the tariffs threaten dollar dominance, comparing it to the Suez Canal crisis of 1956.
Can the Dollar Hold Its Throne?
The impact of de-dollarization remains debated at the moment. J.P. Morgan Research shows that a major shift away from the dollar could take decades due to its deep role in global finance. Peter C. Earle considers the RMB an unlikely alternative to the dollar due to structural limitations.
Also read: The New Currency War: Gold-Backed Stablecoins vs. the US Dollar
The Brookings Institution lists US sanctions, growing debt, and financial technology as forces driving momentum that are progressively weakening the dollar’s dominance.
With Trump’s tariffs, including a 245% tax on Chinese imports, continuing to disrupt global trade, the dollar’s future is in doubt. As the world’s leading currency, however, these policies and changes to the global economy look forward to potential challenges ahead.
