Trump's gamble puts the dollar at risk as the reserve currency

What currency could replace the dollar? I’m not going to pretend I like the idea of trying to hold the world hostage to get more favorable terms for the US, but that is what is happening (as far as the mechanics of economics will allow, at least).

Or maybe the idea would be that there would cease to be one? But if you’re a less stable nation (and certainly almost all nations are still less stable than the US, and 4 years is really nothing on a larger timeline), then you have to hold onto something besides your own currency, right?

Calling it a "gamble" is sanewashing it.

Isn’t just “it has to be cheaper from the us?”driving reindustrialization? If we assume that us based salaries and costs will be higher than foreign, there has to be government imposed penalties (tariffs) to provide breathing room for native industries. And, of course, a general rise in costs will accompany these changes.

If there’s nothing damaging import prices, how can it be cheaper for non state of the art stuff?

I think it’s obvious Trump’s objective is a weaker dollar to increase the cost of imports and strengthen exports, but is employing a silent currency strategy or implicit currency strategy to not spook the markets as is customary.

Isn’t destroying the dollars reserve currency status key to his stated goals? I thought that as long as dollars are the reserve currency, people will want them, and trade goods and services for them just for the privilege of holding them.

So the US will never get manufacturing jobs back as every other country effectively insists on subsidising exports to the us to get the dollars they need for their reserves?

I am not commenting on whether this is true or a good idea etc. but ending the usd as a reserve currency is a key objective, not a risk that might occur unintended no?

Trump's actions arent impacting reserve currency. That's not how it works. Reserve currencies dont shift 20% in a year. It's more like 0.5% per year tops.

The USD has dropped from 65% in 2014 to 57% in 2024

Euro has dropped from 21% in 2014 to 19% in 2024

Yen, Sterling hasnt moved around 6%

CAD is rising slightly 1.75% to 2.75%.

Renminbi raised slightly more from 1% to 2%.

Easy to predict future shifts. CAD is going to lose its temporary boost. Sterling probably going to take 5% out of the euro's share. Otherwise nothing significant regardless of what trump does.

That status is up for grabs no matter what he or any other US president does. If the current US government - Trump et al - succeeds in lowering the deficit and increasing US-based manufacturing - and those are two big ifs - there is some chance of the dollar remaining the semi-reliable (as in 'reliably depreciating') reserve currency it has been in the last 75 years. If they do not succeed the US will end up going bankrupt and will default on its debt payments which will spell the end of the dollar's hegemony. As to whether they can succeed in avoiding this without touching the sacred entitlement cows - Medicare, Medicaid et al - is doubtful. Many European countries have gone through years of austerity in attempts to come closer to the EU-mandated maximum deficits and I suspect the USA will have to go through a similar process. Even the cuts proposed by DOGE do not seem to fill the prospected gap between government income and spending.

I suspect they'll end up raising taxes on high earners but I also suspect this won't be enough since the entitlement programs are inflation-corrected and lack a backing fund. With the current demographical developments in the USA and the rest of the Western and Eastern world an ever shrinking working population will have to pay for an ever increasing non-working population. Since there is no backing fund - current payments are used to pay out current benefits - this system will crash sooner rather than later. If and when the dollar loses its status as international reserve currency the US government won't be able to simply 'print' more dollars to fill the gap and hyperinflation will soon follow.