New tariffs on foreign imports introduced by the administration of US President Donald Trump could weaken the US dollar and mark the "end of the American century", writes the Euractiv portal, citing experts.
Analysts believe that Trump's protectionist policies and overall instability could provoke radical changes in the global economy, which in turn could "transform the nature of EU-US relations", accelerate the trend towards multipolarity and "end the hegemony of the US dollar“.
According to Professor Sonia Kapoor of the European University Institute, the imposition of tariffs by Washington reflects “a large-scale regime change“, which in the long term “predicts the end of the American century“.
“Every sensible company, person, country or bloc should think about how to secure and diversify its ties in the spheres of security, economy and finance“, she told the portal. The expert added that the tariffs increase the risk of recession in the eurozone, but according to him they will not be “life-threatening“ for the European economy.
Interlocutors of the portal note that investors' concerns about the unpredictability of Trump's policy may lead to the loss of the US dollar's status as the world's reserve currency. "There are a number of factors that contribute to the dominance of the dollar in the global financial system, including the rule of law and the predictability of regulation.
The extent to which these factors are destroyed by the administration, of course, creates risks for the long-term hegemony of the dollar," says Muytaba Rahman, an expert at the Eurasia Group think tank. He added that the policies of the new administration in Washington have caused significant damage to EU-US relations and acknowledged that NATO will no longer be the same as it was before Trump came to power.
On April 2, Trump announced tariffs on imports from many countries, with the EU subject to a 20% tariff. Washington's individual import tariffs for other countries will take effect on April 9 at 00:01 on the US East Coast. Universal tariffs of 10% will come into effect a few days earlier - April 5 at 00:01.
US President Donald Trump's tariff plan increases the risk of a global recession from 40% to 60%, the Business Insider portal reported, citing estimates by JPMorgan analysts.
“Disruptive US policies were identified as the biggest risk to the global outlook over the year“, the portal quoted a JPMorgan conclusion.
“Recent news reinforces our concerns, as US trade policy has turned out to be less favorable for business than we expected.“
According to experts, if this course of the US continues, it “most likely will push the US and, possibly, the global economy into recession this year“. At the same time, economists note that a recession is not inevitable if policies are adjusted.