Trump’s tariffs are driving down the dollar: how much has the currency fallen in value and will it continue to fall?

The dollar, which has dominated the world stage for almost a century, is used to store capital, conduct trade, and provide credit.

According to the BBC, Donald Trump decided to change this situation, questioning the status of the American currency in just 100 days of his administration.

The dollar symbolized economic stability for a long time thanks to the strong US economy, security protection, and free trade. However, with the advent of Trump, the situation began to change. The currency market’s reaction to his policies was a decline in the dollar’s value, as investors started to choose other assets instead of American ones.

Trump initiated trade conflicts with countries such as Canada, the European Union, Japan, and Australia, undermining confidence in the United States. In turn, experts observed increased customs barriers and threats that questioned the usual security guarantees for allies. This affected the dollar’s position, although its role was not destroyed.

The United States is heavily dependent on foreign investment. Thanks to capital from abroad, it finances its large debt, which exceeds $36 trillion. A decrease in the inflow of foreign investment could cause serious economic difficulties. Despite this, the dollar remains the strongest currency in the world, as there are no real alternatives: the yuan is controlled by the Communist Party, the euro suffers from weak economic growth, and bitcoin remains an experimental tool.

Trump also threatens the rule of law and the independence of the Federal Reserve (Fed), which may discourage investors from investing in American assets. The dollar has already suffered a decline since the 2008 crisis, but its position remains relatively strong. However, in the event of a massive switch of investors to other currencies, severe financial problems can be expected.

The dollar is still holding up now, but Trump’s policies further reduce the chances of its dominance in the future. Although there are no real competitors for the dollar, distrust from the global community could eventually turn against the United States.