The introduction of new tariffs on imported goods by the administration of US President Donald Trump could undermine the US dollar and mark the “end of the American century”, writes the Euractiv portal, citing expert opinions.
Experts believe that Trump’s protectionist measures and the general instability of the situation could provoke radical changes in the global economy, which, in turn, could “transform the nature of EU-US relations”, accelerate the trend towards multipolarity and “end the hegemony of the US dollar”.
Professor Sonia Kapoor of the European University Institute believes that the new tariffs mark a “major shift in the system” that in the long term “heralds the end of the American century”. “Any reasonable company, person, country or union should think about protecting its interests and diversifying economic, financial and security ties,” he noted in an interview with the portal. In his opinion, tariffs increase the likelihood of a recession in the eurozone, but will not be a “fatal blow” to the European economy.
The portal’s interlocutors also noted that investors’ concerns about the unpredictability of Trump’s policies could lead to the US dollar losing its status as a global reserve currency.
“There are a number of factors that contribute to the dollar’s dominance in the global financial system, including the rule of law and predictability of regulation. The extent to which these factors are being destroyed by the administration, of course, creates risks for the dollar’s long-term hegemony,” said Mujtaba Rahman, an expert at the Eurasia Group think tank.
He added that the policies of the new Washington administration have caused significant damage to EU-US relations, which are “moving toward a new equilibrium,” and also admitted that NATO will no longer be what it was before Trump came to power.
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