
Will Trump's economic policies mirror Nixon's impact on the US Dollar's global dominance?
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What a Weaker Dollar Means for Americans?
Could the Dollar Lose Its Global Role?
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1973 Flashback: Richard Nixon and the Gold Standard Exit
Could Donald Trump Trigger a 'Trump Shock'?
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The US dollar is currently facing one of its worst years in history, and it may even fall further, as US president Donald Trump's economic policies have driven global investors to sell their greenback holdings, as per a report. The currency is down more than 7% so far in 2025, and the greenback is on the edge of an even steeper decline, with Morgan Stanley warning it could tumble another 10% before the year ends, according to a Semafor report.For Americans, that would mean more expensive imported goods, but for US exporters, it could provide a strong boost in global competitiveness, potentially aligning with Trump's push to 'rebalance' US trade, as per the Semafor report.ALSO READ: 4th of July 2025 store hours: What's open, what's closed, and where to shop But beneath the market moves lies a deeper question: could this year's dollar drop trigger a historic shift in America's financial system and its role in the global financial system?According to the report, there are also few alternatives and efforts to de-dollarise, with central banks shifting into gold and China shovelling its currency into developing nations through swap lines. However, as political economist Ngaire Woods wrote for Semafor in an essay earlier this year, 'they haven't dethroned the dollar, but that's because the US government has protected it through sound policy and global engagement,' as quoted in the Semafor report.ALSO READ: July 4th stimulus? What to know about possible payments before Independence Day The last time the US dollar faced this kind of dollar depreciation was in 1973, which happened after the then US president Richard Nixon took the United States off the gold standard in 1971, transforming global finance in the process, as per the Semafor report. That led to a decade of high inflation, low growth, and the weakening of the dollar as European countries delinked from the US currency, according to Foreign Policy Magazine.Nixon's move effectively dismantled the Bretton Woods system that had been in place since the end of the Second World War, as per the Irish Times report. "It had pegged the dollar to the value of gold, with the rest of the world's currencies pegged at various (adjustable) rates to the dollar," wrote the Irish Times in its report.His decision to detach the US currency from gold was because the US did not have enough gold to cover the volume of dollars in worldwide circulation, as reported by the Irish Times. This meant that the US dollar was overvalued and the US had started to have massive trade deficits, and just like Nixon, even Trump believes that the overvalued dollar is hurting US exporters and workers and blames the rest of the world for the US's unpleasant economic condition, as per the Irish Times report.The 'Nixon shock' as it was referred to, was a unilateral attempt to devalue the dollar and rewire the US's trading relationships while maintaining US economic hegemony, which parallels with today and the 'Trump shock," the Irish Times wrote in its report.Now once again the US will face a similar situation due to the uncertainty caused by Trump's tariff war, which will have a high risk on the dollar, inflation, and growth, as per Foreign Policy Magazine. Currently even cryptocurrencies are eroding the dollar's preeminence in the underground economy, which is about 20% of global income, as per the report.Morgan Stanley's Wilson said that, 'Big moves in the dollar tend to create moments of instability,' as quoted in the Semafor report.Mostly due to Trump's trade policies and global investor uncertainty. People are pulling out of the dollar.So far in 2025, it's dropped over 7%, and experts warn it could fall another 10%.
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News18
11 minutes ago
- News18
US, EU reach an across the board agreement on tariffs
Edinburgh(UK), Jul 27(AP) The United States and the European Union reached a tariff deal Sunday after a brief meeting between President Donald Trump and European Commission chief Ursula von der Leyen. A White House deadline was days away for imposing punishing import taxes on the 27-member EU, which is America's leading global trading partner. 'It was a very interesting negotiation. I think it's going to be great for both parties," Trump said. The make-or-break talks were meant to head off trade penalties — and promised retaliation from Europe — that could have sent shock waves through economies around the globe. Trump and von der Leyen held private talks at one of Trump's golf courses in Scotland, then emerged a short time later saying they had reached an 'across the board" agreement. In remarks before the session, Trump pledged to change what he characterised as 'a very one-sided transaction, very unfair to the United States." 'I think the main sticking point is fairness," he said while also noting, 'We've had a hard time with trade with Europe, a very hard time." Von der Leyen had said the US and EU combined have the world's largest trade volume, encompassing hundreds of millions of people and trillions of dollars. Trump said the stakes involved meant of making a deal, 'We should give it a shot." Von der Leyen said Trump was 'known as a tough negotiator and dealmaker" which caused the president to interject with "but fair." She said that, if they are successful, 'I think it would be the biggest deal each of us has ever struck." For months, Trump has threatened most of the world with large tariffs in hopes of shrinking major US trade deficits with many key trading partners. More recently, he had hinted that any deal with the EU would have to 'buy down" the currently scheduled tariff rate of 30 per cent. The Republican president pointed to a recent US agreement with Japan that set tariff rates for many goods at 15 per cent and suggested the EU could agree to something similar. Asked if he would be willing to accept tariff rates lower than that, Trump said 'no." As for the threat of retaliation from the Europeans, he said: 'They'll do what they have to do." Their meeting came after Trump played golfed for the second straight day at his Turnberry course, this time with a group that included sons Eric and Donald Jr The president's five-day visit to Scotland is built around golf and promoting properties bearing his name. A small group of demonstrators at the course waved American flags and raised a sign criticizing British Prime Minister Keir Starmer, who plans his own Turnberry meeting with Trump on Monday. Other voices could be heard cheering and chanting 'Trump! Trump!" as he played nearby. On Tuesday, Trump will be in Aberdeen, in northeastern Scotland, where his family has another golf course and is opening a third next month. The president and his sons plan to help cut the ribbon on the new course. Joining von der Leyen were Maros Sefcovic, the EU's chief trade negotiator; Björn Seibert, the head of von der Leyen's Cabinet; Sabine Weyand, the commission's directorate-general for trade, and Tomas Baert, head of the trade and agriculture at the EU's delegation to the US. The deadline for the Trump administration to begin imposing tariffs has shifted in recent weeks but was now firm, the administration insisted. 'No extensions, no more grace periods. August 1, the tariffs are set, they'll go into place, Customs will start collecting the money and off we go," US Commerce Secretary Howard Lutnick told 'Fox News Sunday." He added, however, that even after that 'people can still talk to President Trump. I mean, he's always willing to listen." Without an agreement, the EU said it was prepared to retaliate with tariffs on hundreds of American products, ranging from beef and auto parts to beer and Boeing airplanes. If Trump eventually made good on his threat of tariffs against Europe, it could meant that everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals would be more expensive in the United States. The US and Britain, meanwhile, announced a trade framework in May and a larger agreement last month during the Group of Seven meeting in Canada. Trump says that deal is concluded and that he and Starmer will discuss other matters — though the White House has suggested it still needs some polishing. (AP) RD RD view comments First Published: July 27, 2025, 23:45 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.


Time of India
27 minutes ago
- Time of India
US, EU clinch trade pact ahead of August 1 deadline; Trump says 'good deal for everybody'
US President Donald Trump on Sunday announced that he had reached a long-anticipated trade agreement with European Commission President Ursula von der Leyen , after a high-stakes meeting at his Turnberry golf resort in Scotland. 'We have reached a deal. It's a good deal for everybody,' Trump told reporters, describing the outcome as a significant win for both sides. Von der Leyen echoed the sentiment, calling the agreement 'a good deal' for Europe as well. Explore courses from Top Institutes in Please select course: Select a Course Category Finance Cybersecurity CXO Data Science Project Management Management healthcare MCA Degree PGDM Data Analytics MBA Leadership Technology Others Public Policy Design Thinking Data Science Healthcare Digital Marketing Operations Management others Artificial Intelligence Product Management Skills you'll gain: Duration: 7 Months S P Jain Institute of Management and Research CERT-SPJIMR Fintech & Blockchain India Starts on undefined Get Details Skills you'll gain: Duration: 9 Months IIM Calcutta SEPO - IIMC CFO India Starts on undefined Get Details The breakthrough comes just days before the August 1 tariff deadline, which had loomed large over transatlantic trade as the EU and the US are each other's largest trade partners and account for 1/3 of all global trade. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 4BHK Villas with Private Garden ATS Infrastructure Ltd Learn More Undo While official details of the pact have not yet been released, EU and US officials had earlier indicated that the agreement would likely include a 15% baseline tariff on most EU goods—a compromise that falls short of Europe's initial zero-tariff ambition but steers both sides away from a damaging escalation. Talks leading up to the deal involved a flurry of last-minute diplomacy, with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick meeting with EU Trade Commissioner Maros Sefcovic ahead of the Trump–von der Leyen summit. Live Events The EU deal marks the fifth trade agreement the Trump adminsitration has drawn up ahead of the implementatio of the so-called "reciprocal tariffs". Earlier this month, the US also inked pacts with Britain, Japan, Indonesia and Vietnam with a deal with India still hanging in the balance. In the absence of a deal, the EU had been preparing countertariffs on $109 billion worth of American goods—an economic standoff that now appears to have been averted. Whether sector-specific levies, such as the 50% duty on European steel and aluminium or pending tariffs on cars and pharmaceuticals, will be lifted or folded into the baseline 15% remains unclear.


Time of India
43 minutes ago
- Time of India
'We have reached a deal...': Donald Trump announces US-EU trade agreement; says 'good deal for everybody' after talks with EU chief
Donald Trump trade deals (AI image) US-EU trade deal: US President Donald Trump on Sunday said that America and the European Union have 'reached a deal' on trade. "We have reached a deal. It's a good deal for everybody," Trump said. EU chief Ursula von der Leyen also hailed a 'good deal' with America, according to an AFP report. Earlier Trump had said that EU export tariffs would remain at a minimum of 15% during crucial trade discussions with the European Union's leader in Scotland. When questioned by a journalist about the possibility of reducing the tariff rate, Trump replied "No" whilst seated next to EU Commission President Ursula von der Leyen. He additionally clarified that pharmaceutical products would be excluded from any trade agreement. Trump and Ursula von der Leyen met in Scotland for crucial discussions, seeking to resolve the prolonged transatlantic trade dispute, with negotiations reaching their final stages. Trump had maintained his stance that there was an equal probability of reaching an agreement with the European Union. The bloc had confronted a 30 percent US tariff unless a trade agreement was secured by August 1. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Struggling With Belly Fat? Try This at Home Home Fitness Hack Shop Now Undo Trump said on Sunday that "the deals all start on August 1", whilst Washington emphasised there would be "no extensions". The European Commission, under von der Leyen's leadership and representing EU member states, was working intensively to secure an agreement to preserve the trade relationship, which accounts for $1.9 trillion annually in goods and services. Speaking at the start of negotiations at Trump's upscale golf resort in Turnberry, the EU leader stated that if an agreement was reached, "I think it would be the biggest deal each of us has ever" made. The meeting between Trump and von der Leyen was held at the president's upscale golf resort situated in Turnberry along Scotland's southwestern shoreline. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now