Mon Sep 09 15:44:48 UTC 2024: ## Trump’s Dollar Dominance Plan Could Backfire, Warns Analyst
**NEW YORK -** A leading currency strategist is warning that Donald Trump’s plan to force the US dollar’s dominance in global trade could have unintended consequences, potentially weakening the dollar itself.
Ulrich Leuchtmann, head of foreign exchange research at Commerzbank AG, laid out a theoretical scenario in which Trump’s proposed 100% tariffs on countries refusing to use the dollar could lead to global economic disruption and a flight from the dollar.
Leuchtmann, a veteran with over 20 years of experience, argues that the aggressive policy could encourage countries to move away from the dollar, ultimately undermining the safe-haven status of US Treasuries. This, in turn, would result in a significant depreciation of the dollar.
While Leuchtmann acknowledged that some analysts believe Trump’s policies would strengthen the dollar, he cautions that the unpredictable nature of global markets makes accurate predictions difficult.
The dollar’s dominant position has been waning in recent decades, but it still holds a commanding 59% share of global foreign-exchange reserves, according to the International Monetary Fund. However, the euro holds a significant second place with almost 20%.
Leuchtmann’s warning comes as Trump continues to rally support for a return to the White House. A recent New York Times-Siena College poll shows a tight race with Vice President Kamala Harris, suggesting that Trump’s popularity remains strong.
Whether Trump’s dollar dominance plan will come to fruition remains unclear. However, Leuchtmann’s analysis highlights the potential risks of such a policy and the complex dynamics at play in the global financial landscape.
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