Trump Tariffs May Trigger ‘Beginning of End’ of US Dollar Safe-Haven Status

President Donald Trump’s aggressive rollout of universal tariffs, known as his “Liberation Day” policy, could mark the beginning of the end for the US dollar’s status as the world’s ultimate safe-haven currency, according to Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory organizations.

As Trump prepares to impose sweeping tariffs on foreign goods—potentially disrupting global trade—Green warns of far-reaching consequences for businesses around the world, including Australia. The policy, which aims to boost the US economy by cutting imports, represents a sharp departure from decades of open-market policy. For Australian businesses, this could translate into both challenges and opportunities in the global marketplace.

“Universal tariffs reduce imports and, by extension, the demand for foreign currencies, which could momentarily lift the US dollar,” Green notes. “However, this inflationary policy undermines the dollar’s long-term strength, which is vital for global trade and the functioning of businesses across borders.”

Higher costs on goods due to tariffs will lead to rising prices for consumers and businesses, increasing operational costs. For Australia, this could add complexity to trade relations, especially in sectors that rely on US imports or exports. Additionally, as the US dollar strengthens temporarily, the Australian dollar (AUD) may experience pressure, making Australian exports more expensive and imports more costly.

“The dollar may spike in the short term, as investors react to the shock by retreating into what they think is safety,” Green says. “But this could set the stage for longer-term challenges, with a weakening US economy, rising inflation, and growing distrust in US leadership undermining global confidence in the dollar.”

The impact on Australian businesses may extend beyond just currency fluctuations. As tensions between the US and other major global players—such as China, Europe, and Russia—escalate, the potential for retaliatory tariffs and strained trade relations could harm Australia’s export-driven economy. Particularly in sectors tied to global supply chains, Australian businesses may face rising costs, disruptions, and uncertainty.

“The world’s trust in the US as a reliable trading partner is key to the dollar’s dominance,” says Green. “If the US begins to be seen as an unreliable player in global trade, or worse, as using its economic size and currency as a weapon, businesses worldwide could start moving away from the dollar, with long-term implications for Australia’s trade relations.”

Already, countries like China and Russia have begun reducing their reliance on US dollars, shifting towards non-dollar trade agreements and digital currencies. This global trend could accelerate, with ripple effects for the Australian economy. If the US dollar’s role as the world’s reserve currency weakens, Australia may need to adapt to new financial systems and currencies, potentially complicating international transactions and market stability.

“Tariffs will increase costs. Inflation will rise. And if the world views the US as the source of global instability, rather than a shield against it, we could see an historic shift in the global monetary order,” Green concludes.

For Australian businesses, navigating this shifting landscape may require strategic adjustments, from hedging against currency risks to diversifying global trade partners. The coming months will be crucial in determining whether this US policy signals a turning point in global economic relations—and how it will affect Australian businesses operating in the broader global economy.

The post Trump Tariffs May Trigger ‘Beginning of End’ of US Dollar Safe-Haven Status appeared first on Small Business Connections.