Trump tariffs, Fed attacks erode dollar safe-haven role
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- Trump's tariffs and military adventurism are chipping away at the dollar's credibility, with the article arguing 'the privilege may be all China's' — a reference to France's Valery Giscard d'Estaing coining the phrase 'exorbitant privilege' in the 1960s to criticize dollar dominance
- America's 'exorbitant privilege' currently lets the US sell 10-year debt at 4.1% yields even as the national debt nears US$40 trillion, a fiscal backdrop the source uses to frame the dollar's vulnerability
- Trump's trade war, regime-change gamble in Venezuela, and joining Israel in attacks on Iran give investors specific reasons to worry about the stability of US assets, per the article
- Trump's attacks on the Federal Reserve — described in the piece as 'the most globally respected US institution' — add another layer of risk to dollar-denominated holdings
Why it matters: The source ties the dollar's eroding credibility to multiple Trump policies — trade war, Venezuela regime-change, joint action with Israel against Iran, and attacks on the Fed. With US debt near $40 trillion and 10-year yields at 4.1%, the article names China's yuan as the potential inheritor of the 'exorbitant privilege' the US has long enjoyed.
