For some 80 years, the dollar’s unparalleled global role – particularly its status as the world’s dominant reserve currency – has conferred upon the United States an “exorbitant privilege,” as Valéry Giscard d’Estaing, then France’s finance minister, famously put it in 1965. While US President Donald Trump has no desire to give up the privilege – and has threatened tariffs against anyone who tries to challenge it – his administration’s capricious, short-sighted, and erratic policymaking may well decide the issue.
For some 80 years, the dollar’s unparalleled global role – particularly its status as the world’s dominant reserve currency – has conferred upon the United States an “exorbitant privilege,” as Valéry Giscard d’Estaing, then France’s finance minister, famously put it in 1965. While US President Donald Trump has no desire to give up the privilege – and has threatened tariffs against anyone who tries to challenge it – his administration’s capricious, short-sighted, and erratic policymaking may well decide the issue.