A tougher economic stance

Since early 2025, Washington has pushed tariffs on a range of goods to shield its industry and raise revenue. If all measures land, the Treasury could pull in roughly 300 billion dollars a year.

Industrial policy has also shifted. Instead of relying on tax incentives, the government is now building on national-security law to take minority stakes in strategic firms across critical sectors.
 

Global trade is not cracking

The US remains pivotal not just because of the dollar, but because of its companies, financial system, market size and flexibility. Even with higher barriers, trade flows hold up. The WTO expects goods trade to grow 2.5 percent in 2025 and services trade 4%. The US still represents about 13 to 15% of world trade because global exporters still need the US market, which remains unmatched in scale and appetite.
 

Triffin’s paradox

The dollar is involved in about 89 percent of Forex transactions. That is even higher than in 2022. Trading volumes have jumped, especially in hedging tools like forwards and options. Liquidity and deep markets keep the dollar at the centre, especially during periods of high volatility.

Still, even a dominant dollar can weaken. Triffin’s paradox explains why: when the whole world relies on your currency, you need to supply so much of it abroad that you end up importing more than you export. Those ongoing deficits can end up pulling the currency lower over time.
 

No viable alternatives

Yes, the renminbi is gaining ground, especially in trade finance, and Chinese banks now hold more offshore renminbi than ever. But globally it remains small. The euro, yen, Swiss franc and cryptocurrencies have not come close to threatening the dollar’s role.
 

A lasting structural power

Global portfolios stay heavily invested in US assets, though more managers now hedge their dollar exposure. That hedging could still weigh on the currency in 2026.

Even as the US grows more protectionist and more interventionist, its pull on the global economy has not weakened. That is the paradox at the heart of the US economy: even while the country turns inward, it manages to remain the world’s centre of gravity.

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