ECOTOMICS

President Donald Trump's announcement of significant tariffs on goods from China (34%) and Vietnam (46%), effective April 9th, has triggered a sharp response from China. The world's second-largest economy announced a retaliatory tariff of 34% on all US goods, starting April 10th. China's tariff commission condemned Trump's actions as unilateral bullying that violates international trade rules and harms global economic stability.

Meanwhile, Trump indicated that Vietnam might be open to negotiating and reducing their tariffs to zero. He expressed gratitude to Vietnam's General Secretary and looked forward to a future meeting.

Despite the escalating trade tensions and a significant slump in global stock markets, Trump remains optimistic, predicting an economic boom. Analysts, however, warn that there might be a limited window of around two months for successful negotiations to avoid potential economic recession or stagflation. While some administration officials suggested the tariffs are permanent, Trump hinted at the possibility of future deals.
Source : www.nytimes.com/2025/04/04/business/china-trump-ta…

7 months ago | [YT] | 1

ECOTOMICS

Over the past two decades, the global market share of the US dollar has declined from 71% to 59%, and there are indications that it could continue to decrease in the future. This trend has negative implications for the United States as the use of currencies in global trade follows a zero-sum game, where every time a currency other than the dollar is used, it results in a loss for the dollar. In the event that other credible alternatives gain popularity, the dominant position of the US in the global market could be at risk.

The decline of the US dollar is inevitable, as no fiat currency has ever survived in the long run, and no dominant sovereign state has ever repaid its national debt. In fact, it is likely that the end of the dollar's dominance will happen within the next 10 or 20 years, and here's why:



The US dollar became the world's primary reserve currency after World War II when it was backed by gold.
In 1971, Richard Nixon closed the gold window, which led to a serious decline in the value of the dollar.
Nixon saved the dollar by instituting the Petrodollar system, which stabilized the currency and provided a de facto commodity backing in the form of oil. This system increased global demand for dollars and replaced the gold standard.


The power of the Petrodollar system peaked in 1985 and has since gradually declined. The value of the USD bottomed out in 1992 and recovered into the early 2000s.


More major oil exporting countries began accepting payment for oil in currencies other than USD in 2001-2002, leading to further dollar declines that bottomed out in 2008.


The entire Petrodollar system now hangs by a thread and is largely dependent on the continued stability of the royal family in Saudi Arabia. The dollar has rallied since the 2007-2008 recession, but it still shows a long-term pattern of lower highs and lower lows since 1985.


If the KSA falls, any semblance of commodity backing for the USD will cease to exist, likely resulting in the wholesale dumping of dollars by Asia and the rest of the world for a new currency backed by something other than trust.
A scenario could develop where liquid assets flee Europe and move into the dollar if the EU's situation worsens before problems arise in the KSA. However, this would only set up a phase transition bubble that would eventually burst.


The real key to the future of the dollar is what happens with the KSA. The decline in the effectiveness of the Petrodollar system is evident since 1985. If the KSA falls, the Petrodollar system will likely collapse, and the USD's demise will be inevitable.

2 years ago | [YT] | 2