Is the dollar hegemony at risk? What’s behind Trump’s plan to devalue the US money

The rise of the dollar as a reserve currency of the world Is it the cause of the manufacturing decline in the United States? So many exponents of the current Trump administration think they see In the devaluation of the green ticket, the key to reopening the factories And « make America again ». According to Stephen Miran, economic councilor of the White House, « the dollar reserve function generated persistent currency distortions and has contributed, together with the unfair commercial barriers imposed by other countries, to creating unsustainable commercial deficits ».

The devaluation of the dollar

The solution? Make the dollar devalue or, which is the same, force other countries to re -evaluate their coins Under the threat, for example, of the duties. So far the strategy is working: since the beginning of the year the dollar has weakened by 8.5% compared to the basket consisting of the other greater currencies. The Green Ticket for the euro lost almost 9% in 2025, one of the most violent downward movements in recent history. Someone imagines that behind this devaluation – which makes American exports more competitive – There is a precise strategy. And it highlights the experience in handling the currencies of the Treasury Secretary, Scott Besent, former manager of George Soros’s funds and among the architects of the sensational speculative attack on the 1992 pound.

The collapse of the manufacture

Many economists doubt However, that the strength of the dollar is the real reason why the share of workers employed by the manufacture in the United States has fallen from 24% in 1974 to 8% in 2024. « In the last 50 years the dollar has been swinging a lot, sometimes appreciating – as in this decade – sometimes depreciating itself, as has done for 10 years in a row from 2002 onwards », observes the researcher, David Lubin. « During these cycles the dollar courses have changed without therefore significantly changing its status. » Indeed, if anything, the strengthening of the dollar in recent years has been accompanied by a weakening of its function as a global reserve currency. In 1st years the weight of the dollar in global evaluation reserves dropped from 65 to 58% and the US public debt share in hand foreign investors fell from 50% to about a third of the total of over 36 thousand billion.

The link with the American boom

The reason for the enormous deficit in the exchanges of the United States with the rest of the world, Lubin says, «It is simply that the American economy has shown much more vitality than most other countries: The decade of American exceptionalism was the cause of both the strength of the dollar and the growth of the commercial deficit « . The gap of pro-capita GDP between the United States and Europe has for example expanded to 30%, increasing the purchasing power of goods from all over the world for American families and businesses. Although, it must be said, this increase in wealth has been distributed in a very unequal way on the American territory, generating those social tensions that many experts consider the origin of the Trump phenomenon (and well narrated in the American elegy autobiography of the vice -president JD Vance).

Trust in the green ticket

If the force of the dollar depends above all on the strength of the economy of the country below, therefore, A recession in the United States should lead to a devaluation of the green ticket. Just the fears of a US’s screwdriver due to the commercial war is probably the cause before the sudden descent of the dollar in recent months. If these cyclical concerns, however, will also add up the loss of trust in the reliability of the American economic-political system, Then in danger there will not be only the value of the dollar as an exchange currency but also its function of global reserve and the privileges associated with it, For example, in terms of ease of refinancing the enormous US public debt.

The lack of alternatives

In short, are we at the dawn of the sunset of the hegemony of the dollar? Soon to say: similar prophecy has been repeated to any financial crisis, but so far it has never come true. The role of the dollar in global commercial exchanges and the geopolitical influence of the USA is such that for companies and investors it is difficult to find an equally reliable and universally accepted replacement currency. In fact, the euro suffers from the political fragmentation of the countries that adopt it, in the grip of constant centrifugal thrusts, while – assuming that the other governments are willing to recognize it – Beijing does not seem willing to play this role which, however, would entail an appreciation of his Yuan and therefore a loss of competitiveness of his exports.