Economist Peter Schiff has pushed back against President Donald Trump’s claims regarding the United States being the benefactor of global trade, arguing that it was, in fact, its biggest beneficiary.
The World ‘Subsidizes’ The US
On Saturday, in a post on X, Schiff said that Trump had it “backwards” when he said that the U.S. had subsidized Denmark, along with other countries in the European Union and across the world, by “not charging tariffs.”
Schiff pushed back against this claim, saying that it was, in fact, the U.S. that was being subsidized by the world by virtue of the U.S. Dollar being the global reserve currency.
“The dollar’s reserve-currency status allows us to live beyond our means,” he said, while warning that the soaring U.S. national debt, along with Trump’s tariffs and growing military threats, are putting this “exorbitant” privilege increasingly in jeopardy.
Schiff concluded with a stark warning saying that when this privilege is lost, “economic collapse will follow.” These sentiments were echoed by Economist and author of “The Black Swan,” Nassim Nicholas Taleb, who reposted Schiff’s post on X.
Dollar Dominance Starting To Fizzle Out
Schiff’s post comes in response to Trump’s Truth Social post last week, in which he defended his decision to escalate tariffs against Denmark and members of the European Union, in his bid to secure U.S. control over Greenland by claiming that the U.S. had been subsidizing these countries for years.
EU states have since responded with threats of retaliatory tariffs against the United States, sparking fresh concerns of trade disruptions.
A year into Trump’s second term, the U.S. Dollar Index (DXY) is down 9.35%, currently trading at 99.201 against a basket of other currencies.
The dollar’s share of global reserves has fallen to 57% from 72% in 1999, as the greenback comes under pressure from rising fiscal deficits, policy uncertainty and the growing appeal of digital assets as alternative stores of value.
Photo: Ibragimova from Shutterstock
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