Chinese Yuan rise in international trade: The vast de-dollarization of international trade puts the American economy and power in jeopardy. The US dollar’s hegemony in international trade and finance is in danger from the Chinese currency as a result of Russia’s decision to make the yuan its primary trading currency.
This indicates that rather than using the standard dollar for international payments and transactions, an increasing number of nations may shortly switch to the yuan.
Saudi Arabia and Iran, which are seeking an economic alliance with China and Russia, are two other nations that are likely to choose the Yuan for their international financial dealings. As more nations are predicted to unite with the BRICS, the US currency is thus in danger of being destabilized. Brazil, Russia, India, China, and South Africa are together known as the BRICS.
These five nations continue to have the largest rising economies in the world, which is a vital problem.
If the BRICS gain power and replace the dollar with either the Chinese Yuan or a new currency of their own, the United States risks losing its position as the world’s preeminent political and economic force.
Former Assistant Treasury Secretary Monica Crowley responded to the threat that the BRICS nations offer to the US economy by revealing that although the dollar has remained the safest currency since the end of World War II, its supremacy is slowly eroding.
For the past 50 years the dollar has not been backed by tangible assets like gold. Given that the United States’ great economic strength, which served as a substitute for gold is now under danger this is already problematic. But, the current trend does not appear to be in favor of the dollar, she continued, noting that since oil was also sold in dollars, it provided the currency that merited dominance.
If the trading in oil via the US dollar stopped, she claimed, the US dollar would cease to exist as a hard currency. She also referred to the US dollar’s current situation as a “perfect storm.”
According to Monica Crowley, the US has exploited the dollar’s status as the world’s reserve currency through rash monetary and fiscal decisions that caused the dollar to lose value.
She claims that the Ukraine conflict, domestic energy production, and America’s rivals, lead by China, forging a new Economic Bloc are all signs of President Joe Biden’s weakness.
The use of US dollars is starting to decline on a global scale. If this new economic union begins to trade oil using currencies other than the dollar, the result will be extremely severe inflation in the United States.
Compared to losing its superpower status, the United States is more likely to lose its economic hegemony in the world, she stated.
It is true that the US dollar is in danger as the Chinese yuan gains strength in international trade.
