Is there an operation underway to save the dollar?

The US dollar underpins global trade, but its dominance faces challenges amid geopolitical tensions and economic shifts. Speculation points to a US "operation" to preserve its centrality, especially in the face of China's rise and decisions like the forced sale of TikTok.  

 The role and history of the dollar.

 The dollar is used in 88% of international transactions, according to SWIFT (2023), and comprises 59% of foreign exchange reserves, according to the IMF (2024). It prices commodities such as oil and gold, simplifying commercial contracts. US Treasury bonds, seen as safe havens, attract capital during crises, maintaining demand for the currency.  

 This privilege allows for the financing of fiscal deficits of US$1,8 trillion in 2024, according to the Congressional Budget Office, with low interest rates. However, decisions by the Federal Reserve, such as the 4,5% rate in 2024, generate currency depreciation and inflation in emerging economies, highlighting inequalities.

 The supremacy of the dollar was established by the Bretton Woods Agreements in 1944, which linked it to gold. After the end of convertibility in 1971, the economic and military strength of the US and petrodollarization, initiated in the 1970s with OPEC, consolidated its position. The dollar is essential even in transactions between third parties, such as Brazil and China, reinforcing its global relevance.

 Strategies to protect the dollar

 The text of the America-China Watcher This suggests that the US provokes global instability through sanctions, conflicts in the Middle East, or pressure on China to attract capital to Treasury bonds, strengthening the dollar. This tactic would offset the public debt of US$33 trillion, equivalent to 120% of GDP in 2024.  

 China, however, is holding its own, with a domestic market of 1,4 billion consumers, advances in technologies such as 5G, and a robust military deterrent. Investments in East Asia grew by 12% in 2024, according to UNCTAD, reflecting regional stability that challenges the idea that crises favor the dollar.

 Conflicts involving Israel and Iran could be used to destabilize markets, but large-scale wars are unsustainable due to the costs and the risk of diverting attention from fronts like Taiwan, where China conducts military exercises. This dynamic reveals the complexity of maintaining the dollar's hegemony in a multipolar world.

 TikTok, tariffs, and protectionism

 The demand to sell TikTok to a non-Chinese owner, under threat of a ban, exemplifies the use of economic power against China. In April 2025, Trump extended the sale deadline by 75 days, following negotiations with ByteDance, but continued pressure, as The Washington Post (04/04/2025). The claim of "national security" is criticized.  

 Senator Mark Warner highlighted that treating TikTok as a bargaining chip undermines American credibility.The Washington Post(04/04/2025). The measure ignores the global nature of technology, reflecting a protectionist stance that contradicts the interconnected digital economy and aims to limit Chinese influence.

 Since February 2025, Trump has imposed high tariffs, with the effective average rising from 2,5% to 27% by April, the highest in a century, according to the Wikipedia (02/07/2025). Tariffs of 25% hit Canada and Mexico, 10% China, and 20% Europe, with 57 countries facing additional tariffs (PBS News, 03/04/2025).  

 In April, an “economic emergency” justified a 10% tax on all imports via IEEPA (W, 02/04/2025). China faced tariffs of 145%, retaliating with 125% (Wikipedia, 27/06/2025).

 These tariffs are linked to the dollar. Trump argues that the currency is overvalued as a global reserve currency, and tariffs would weaken it, favoring exports.Wikipedia, 02/07/2025).

 However, Diane Swonk of KPMG warns that uncertainty increases volatility, paradoxically strengthening the dollar as a safe-haven asset.The New York Times, 09/04/2025). Tariffs increased costs by US$19,3 billion in April 2025 (Journal of Supply Chain Management, 2025), reduced growth to 1,6% (JP Morgan, 08/06/2025), and encouraged de-dollarization, with agreements in yuan between China and Saudi Arabia.

 Trump's inauguration on January 21, 2025, brought instability. Statements such as threats of 50% tariffs on the EU (PBS News, 03/04/2025) shake global confidence. Tariffs of 25% on steel and aluminum (JP Morgan, 08/06/2025) contradict interdependence, where 70% of Mexican exports go to the US. Chinese retaliations of 34% cost US$ 330 billion in American exports (Tax foundation, 02/06/2025), weakening the economy and the dollar.

 Dollar as a tool of pressure

 The centrality of the dollar allows for sanctions against Russia, China, Iran, Cuba, and Venezuela. Russian sanctions have reduced its GDP by 2% per year.World Bank, 2023), and the embargo on Cuba cost US$130 billion (ONU.  

 Iran has lost 50% of its oil exports since 2018, and Venezuela is facing a humanitarian crisis. Restrictions on Chinese companies like Huawei illustrate the reach of these measures. Control of SWIFT, with 90% of transactions passing through New York, isolates economies but encourages alternatives like the Chinese CIPS system.

 The dollar, as a reserve currency, becomes a tool of political and economic coercion. Unilateral sanctions limit the sovereignty of nations, reinforcing American power, but also drive efforts to reduce dependence on the dollar, such as the BRICS agreements in local currencies.

 Transition to another currency and multilateralism

 The transition to another currency is feasible, driven by financial technologies. The yuan, with 2,8% of global transactions (SWIFT, 2024), is gaining ground with oil deals.  

 A basket of currencies or IMF Special Drawing Rights (SDRs) would reduce dependence on the dollar. Digital currencies, such as the digital yuan, tested in 20 provinces, are promising. Economic blocs, such as the BRICS, accelerate this change, which can be implemented with multilateral support.

 The world can no longer tolerate political hegemonies. Multilateralism, where nations share responsibilities, is essential. Economic interdependence, with global supply chains, makes unilateralism obsolete. Blocs like the AfCFTA and the BRICS reflect the demand for cooperation. Multilateralism promotes stability, reduces economic conflicts, and balances power, preventing abuses such as unilateral sanctions.

 Joseph Stiglitz advocates for a multipolar system to mitigate inequalities.Making Globalization Work, 2006). Barry Eichengreen predicts advances in the yuan with digital currencies (Exorbitant Privilege, 2011). The French philosopher Thomas Piketty criticizes the dollar for perpetuating inequalities, proposing a neutral currency (Capital in the 21st Century.  

 German economist Heiner Flassbeck suggests a common European-Asian currency for equity (Failed Globalization( , 2019). These voices reinforce the need for a fairer financial system.

 Arguments for a different currency include autonomy, as sanctions limit sovereignty; stability, since American monetary shocks affect the world; equity, with developing countries paying high interest rates in dollars; and resilience, reducing systemic risks from concentration in the dollar.

 Common currency, experience and UN reform

 A common currency, such as a reformed SDR, would neutralize hegemonies. Managed by the IMF, it would facilitate equitable transactions. A trading system with balanced tariffs would guarantee equal access to markets. Global cooperation is challenging, but vital for trade that unites nations.

 During my 18 years at Banco do Nordeste do Brasil, in the 80s and 90s, managing the foreign trade portfolio, I realized that the world has changed profoundly, but certain patterns persist. The only constant is change. Back then, the dollar dominated, but its use as a political tool was less evident. Today, globalization demands fairer systems, and the transition to another currency is urgent.

 The UN needs reforms to fulfill its mission of global peace, as I discussed in another article. In May 2025, debates about restructuring the Security Council gained momentum (Reuters(June 15, 2025). A strengthened UN would support a multilateral financial system, reducing economic conflicts.

 A plea for justice.

 The hegemony of the dollar perpetuates inequalities and transforms trade into geopolitical warfare. The pressure on TikTok and the 2025 tariffs reflect a protectionist stance incompatible with globalization. The transition to a common currency is viable and necessary.  

 Multilateralism is the path to a world where nations cooperate as equals. History shows that systems evolve, and the dollar may lose ground. The challenge is to ensure that change serves humanity by promoting global economic justice.