Jim O’Neill The U.S. dollar’s dominance may be ending
The fact that some of Trump’s closest economic advisers have spoken openly about the need for other currencies to be stronger. That is why they have been pushing some new version of the famous 1985 Plaza Accord,
The usual counterargument is that tariffs are needed because the dollar’s strengthening cannot be stopped, given the “exceptional” U.S. economy’s unrivaled merits.
America is “exceptional.” It boasts deep, liquid financial markets and cutting-edge technology, and it is preeminent in security matters and superior to its peers in terms of overall growth.
As I noted last month,
policymakers in many countries — especially in Europe, but also in China — recognize that they must make changes to reduce their economies’ dependence on the U.S.
If the U.S. is now abandoning these roles, others will be forced to stand up for themselves, and the dollar’s unquestioned dominance could finally come to an end.
Jim O’Neill MarketWatch 19 March 2025
This commentary was published with the permission of Project Syndicate — Will the Dollar Continue to Fall?
Although I no longer live and breathe the markets on a daily basis, I have never forgotten some key lessons I learned early on as an economist working in the financial industry:
it is much easier to be wrong than right.
Jim O’Neill is a former chairman of Goldman Sachs Asset Management and a former U.K. Treasury minister.
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