There’s a new field of academic research — or if there isn’t, there should be — that attempts to predict the longer-term impacts of the Trump presidency on basic norms. The Wall Street Journal recently posted a nice entry in the field relating to the heating up of the NAFTA renegotiation: “Retreat from Trade Deals Poses a New Threat to the Dollar.”
The idea is simple: As the United States turns more protectionist, other countries are stepping into the breach and making trade deals that leave us out. Could this process lead to the U.S. dollar no longer reigning supreme as the dominant currency in global commerce?
The article concludes that this is a worrisome possibility. Central banks and currency investors are already “ramping up investment in such currencies as the euro and Chinese yuan, reflecting the effects of such moves as the U.S. retreat from the North American Free Trade Agreement and Trans-Pacific Partnership.”
But how worrisome is the dethroning of King Dollar? A vocal minority, among which I count myself, believes that what was once an exorbitant privilege has become a cumbersome burden.
