Recently, Trump's new statement on tariffs has once again drawn market attention. He threatened on social media that if countries abandon the dollar, all the BRICS nations would face 100% tariffs. Although this statement has not been taken seriously by all economists, it has had a noticeable impact on the dollar and international gold prices, boosting the dollar index and lowering gold prices. Meanwhile, some analysts suggest that Trump's proposed tariffs might backfire, reducing the dollar's appeal and pushing up international gold prices.
Independent economist Julian Jessop commented on social media that Trump's threat highlights the uncertainty the dollar faces. He stated, if the dollar is so strong and "irreplaceable," why protect its status by imposing tariffs? This question reveals more risks that the dollar and the US economy might confront.
Even though Trump's tariff threats are seen by some economists as lacking practical significance, it indicates that the US government continues to use the dollar as a weapon. This approach might encourage central banks worldwide to accelerate the diversification of foreign exchange reserves by increasing their gold holdings. Experts say that if an increase in tariffs leads to heightened global trade friction, gold's role as a tool for hedging economic uncertainty will become more robust. Many countries may amplify their gold purchases and reduce their investments in the dollar.
Behind the tariff threats lies the uncertainty facing the dollar's future. Some analysts believe that this threat might instead accelerate global questioning of the dollar's dominance, further solidifying gold's position as the only alternative reserve asset. The rise in gold prices and the relative weakness of the dollar could become important indicators of future economic trends, especially since Trump continues to pursue "America First" policies.
