Not all countries, as it turns out, use the US dollar as a payment method. For example, China and Russia switched to the euro or to their national currencies for international settlements. This is much safer. The reason for this is endless sanctions against Russia and the trade war between China and the United States.
Moreover, Iran is also moving away from the US dollar after Washington sought to trample down the economy of this country. However, Europe interfered and conducted trade with Iran without the participation of the US dollar.
It is clear now that the greenback is not doing well despite its status as the world's reserve currency. Is the American currency in danger because of its own country?
Indeed, it will be in danger if US foreign policy does not change. And it is unlikely to change, so the situation with the US dollar will only get worse. The US dollar clearly shows everyone that the economy should develop according to its own laws and not according to the political will of the American president.
Despite the fact that the US president signed an executive order on a new stimulus package to support the economy, the dollar is unlikely to recover soon. And there are several reasons for that.
A sharp escalation of the trade war between Washington and Beijing is expected in November after the US presidential election. Then the American currency will face another failure, as investors fear sanctions risks. This situation creates uncertainty among investors and may force US private companies to reduce costs. Also, market sentiment may deteriorate due to the high chances of victory of Democrat Joe Biden and aggravation of relations with China.
Goldman Sachs also warns of a possible recession in the US economy due to the trade war with China.
The trade conflict between China and the United States began in 2018, when Washington decided to impose tariffs of 25% on Chinese imports in a total volume of $34 billion a year. China did not get rattled and hit back.
For the United States, these sanctions were not enough and they introduced additional tariffs on products from China in a total volume of $200 billion. Allegedly, the Chinese authorities did not fully comply with the reached agreement. China reacted again, and more than 5,000 American goods worth $60 billion were under sanctions.
The story doesn't end there. The White House recently announced that it will continue to impose tariffs on imports from China, thus putting a new deal on halt. A week later, China decided to use a record decline in the yuan against the US dollar. After that, the US Treasury accused the Chinese authorities of trying to manipulate the currency.
It is obvious that the US authorities continue to turn a blind eye to the fact that their policy is killing the dollar. Most likely, the situation will continue to deteriorate, and the dollar will lose its attractiveness and its status as a world currency.