King Dollar’s Reign Looks Secure — For Now
Trump’s punitive tariffs have dealt a blow to US credibility and the greenback. It’s a bigger leap to project the currency's demise.
A history lesson for the lynchpin of contemporary capitalism. Richard Nixon and his Treasury Secretary John Connally.
Photographer: Bettmann/Getty Images
Liberation Day is barely a fortnight ago, and the jolt is taking its place in the annals of modern history. Comparisons have been drawn with Richard Nixon’s abrupt decision in 1971 to end the system of fixed exchange rates that prevailed for a generation. Diplomats and investors were appalled. The dollar's time as the anchor of world commerce was coming to a close — or so a popular narrative has gone.
Nixon's unilateral action was shocking. His team was rightly accused of arrogance and bullying — as President Donald Trump is now with the punitive tariffs he imposed this month. Then, as in the past two weeks, it was popular to pronounce the upheaval as presaging the demise of dollar dominance. Certainly, American prestige has taken a hit. The dollar is being pushed lower by traders and US Treasuries, a pillar of the postwar financial setup, have been roiled.