The US dollar has seen its worst start to the year since 1973, with a decline of over 10% this year alone. This significant drop in value has raised concerns among investors and economists about the long-term implications for the US economy.
President Trump’s chaotic policies, including tariffs and his attacks on the Federal Reserve, have shaken investor confidence in the US. The country’s ballooning debt, with the GOP megabill passed last week adding trillions of dollars to the national debt, has also raised eyebrows.
Some experts argue that this decline is a sign of a long-term shift away from the dollar’s dominance as the world’s reserve currency. Kenneth Rogoff, former IMF chief economist, believes that over the next 10-20 years, we can expect to see a more multipolar system with currencies like the euro and Chinese yuan challenging the dollar.
The case for this decline is not without merit, however. The US has been living beyond its means for years, with rising debt levels contributing to the dollar’s decline. A weaker dollar can have both positive and negative effects on the US economy. On one hand, it can make domestic tourism cheaper and boost exporters like Apple. On the other hand, it can make imports more expensive, potentially harming workers in sectors such as manufacturing or agriculture.
As the world continues to grapple with rising debt levels and economic uncertainty, it remains to be seen whether the dollar’s decline is a temporary blip or a sign of a deeper shift. One thing is certain: the US must address its financial challenges if it hopes to maintain its position as a global economic leader.
Source: https://www.npr.org/2025/07/07/nx-s1-5455867/trump-dollar-value-debt-currency