Former U.S. President Donald Trump has warned that the U.S. losing a currency war against China would be like America losing a world war. Trump cautioned that the U.S. dollar is “what makes us powerful and strong.” Speaking in an interview with Fox News, Trump explained that China pushing a large portion of the world off of the dollar standard would be the equivalent of America losing a world war. “Iran gets together with Saudi Arabia through China. And China is taking over … And, I heard a couple of people say, ‘Well, we’ll never lose a dollar standard.’ Are they kidding?” he said, elaborating: China wants to change the standard, the currency standard. And if that happens, that’s like losing a world war. We’ll be a second-tier country.
Trump further mentioned that Western countries have already lost Brazil to Chinese influence and are on the verge of losing Colombia within their own hemisphere. He also revealed that Iran and Russia have already aligned themselves with China. Trump proceeded to comment on France’s relationship with China and a recent meeting between French President Emmanuel Macron and Chinese President Xi Jinping, reiterating: What’s going on? We’re losing. If we lose our currency — that’s the equivalent of losing a world war. Our currency is what makes us powerful and strong. The former president insisted that had Macron made his overtures to China while he was in the White House, he would have contacted the French president and threatened him with economic consequences, such as limiting the import of French wine as a penalty. According to Trump, all countries are difficult to deal with because they want to take advantage of the U.S. “They’re all difficult because every country rips us off. But France is in particular very difficult,” he stated.
The former U.S. president revealed that he personally got on the phone with the French and threatened to impose 100% tariffs on champagne in response to France’s plan to tax American companies. “I get a call back 15 minutes later,” Trump further shared, adding that the French told him: “We’ve decided we’re not going to charge American companies.” However, the former president noted: “But you know what happened once I left, now they’re charging them.”
Last week, Trump warned that China is trying to replace the U.S. dollar as the number one currency throughout the world, predicting that under the Biden administration, they will “probably” succeed. “This would be the biggest defeat for our country in its history,” he stressed.
The U.S. dollar has been the world’s dominant reserve currency since the end of World War II. However, the dollar’s status has been challenged in recent years, with China and Russia among the countries seeking to reduce their dependence on the greenback. In 2020, China launched a digital version of its currency, the yuan, in a move seen as a potential challenge to the dominance of the U.S. dollar. The People’s Bank of China has said that the digital yuan will be used for domestic purposes and will not replace the U.S. dollar as the world’s reserve currency. However, some analysts believe that the digital yuan could eventually become a rival to the U.S. dollar.
In conclusion, Trump’s warning about the U.S. losing a currency war against China and the potential consequences of such an outcome should not be taken lightly. While the U.S. dollar remains the world’s dominant reserve currency, its status is not guaranteed, and the rise of China and other countries could pose a threat to the dollar’s dominance in the years ahead. As such, policymakers in the U.S. and other countries should take steps to ensure the stability and strength of their currencies in the face of these challenges.
