NICHOLAS SHUBITZ: Donald Trump re-election could accelerate dedollarisation
A mix of tax cuts, tariffs and isolationism may see the US currency lose its pre-eminent position in global trade
If Donald Trump is re-elected to the US presidency it could accelerate global dedollarisation. Though Trump’s desire to address the twin deficits may be justified, his approach could be risky for the dollar. His isolationist foreign policy might empower the Brics bloc, for instance, while his tariff plan could reduce the US dollar’s purchasing power. Additional tax cuts would increase the budget deficit, with a further negative effect on the currency.
The US presidential election is shaping up to be a very tight race, with a few thousands votes in a handful of swing states potentially determining the outcome. While both candidates have made tax reform proposals that call US fiscal credibility into question, Trump’s mix of tax cuts, tariffs and isolationism could see the dollar lose its pre-eminent position in global trade. ..
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