By: L. Pereira
The Eastern and Western hemispheres have been at odds since contact was first established, but for the past two centuries the United States has been the East’s biggest foe. This time, however, China has struck an unprecedented blow to US supremacy.
The Chinese government has held several discussions with its allies in relation to establishing the yuan as an alternative to the dollar for trade, with Brazil being one of the newest signatories of the measure. Brazil is one of the world’s foremost agricultural powers (and the leading producer of soybeans, having surpassed the US in 2018) and one of China’s biggest commercial partners.
This measure not only weakens the dollar’s position as the world’s main monetary reserve, but also makes it immensely difficult for the US to exert dominance over countries that adopt it.
The Americans’ sanctions to Russia have been instrumental in response to the Ukraine war. but with Russia solidifying closer ties to Beijing, the US may find it increasingly difficult to deter its imperialistic territorial advances. What does this measure effectively mean for the United States and for the rest of the world? The US is not taking this lightly. Alerts have been made by several American media outlets that this new chapter between Washington’s and Beijing’s rivalry may be a tipping point for the East. This is perceived as one of the greatest threats to the dollar since the United States consolidation as the world’s leading superpower.
However, this does not necessarily dictate the dollar is doomed . It is still the world’s monetary reserve, as has been for nearly a century, and China has not yet surpassed America as the leading economy of the world. The Chinese might even have a demographic ticking time bomb as several experts predict a collapse of their population by the end of the century due to its aging workforce.
In summation, this new chapter to the East-West historic rivalry presents legitimate relevance, but does not seem the end of the dollar and US global superpower.