Trump's tariffs reemphasize the need for a world currency

​Trump's tariffs cannot be applicable as long as the US dollar is used as World Currency. It's as simple as that. 

While every country has the sovereign right to protect its economy and impose tariffs, the USA cannot justifiably impose these tariffs till a new world currency is established.

Since the 1970s, the US has been printing currency based on the transactional demand of dollar by the world economy, and not against a gold reserve as mandated earlier in the Bretton Woods Agreement. The 1944 Bretton Woods System required countries to guarantee convertibility of their currencies into U.S. dollars, with the dollar itself convertible to gold bullion. The Bretton Woods conference also led to the creation of two key institutions: the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development, which is now known as the World Bank. 

On 15 August 1971, the United States ended the convertibility of the US dollar to gold, effectively bringing the Bretton Woods System to an end. This allowed the dollar to function as a fiat currency, backed not by precious metals, such as gold or silver, nor by any other tangible asset or commodity, but by government decree. Following the collapse of the Bretton Woods System in 1976 by the Jamaica Accords all the major currencies in the world became fiat money.

Thanks to its successes in World War II and the geopolitical leverage gained from the Versailles Treaty after World War I, USA took the lead in organising world finances to its own convenience. Now as long as the world traded, utilising the US dollar, America could keep printing its currency, effectively enriching its economy. Despite the faults in this system, the world, by and large, accepted this new post-war financial order, to keep the global economy running.

Any nation daring to challenge this US dollar ​hegemony was met with war,  as experienced by Libya, Iran, and Iraq leading to severe consequences including carpet bombing and regime change. So, in short, the world had grudgingly accepted the ‘US Standard’ and the prevailing currency rates. However, countries like China smartly managed this well, by strategically devaluing their currency and playing with the exchange rates to ensure their products were cheaper for the world to buy, and secure their economy.

Thus, a system, where one nation can print currency at will to keep the economy running and yet dictate tariffs is an absurd idea. It exclusively benefits the issuing nation, enabling it to provide ridiculous subsidies to their farmers, manufacturers, auto industries, arms manufacturer (details of which are given in the blog - https://warrioramerica.blogspot.com written ​quite a few years ago)— and then limit fair international trade through tariffs. It's like saying the owner of the ball can unilaterally decide all the rules of the game. 

Going forward, a re-evaluation of the global financial architecture is paramount. With the World Bank as a cornerstone, the need for a digitally-tracked World currency to combat counterfeiting and terror funding, is more crucial than ever. Across the world, people have come to realise that wars are not a solution to anything; they are just created to satisfy the egos of ‘old men’ who play their cards using religio-political rhetoric to grab power. Thanks to the internet, younger generations have transcended national, international and religious divides through global interconnectedness in thought, music and love. Today, people are more open to the exchange of ideas and business growth while prioritising environmental responsibility.

Switching to a world currency will undoubtedly have its teething troubles. But if every country accepts current exchange rates as the baseline and collectively move forward, this can be sorted out much sooner, leading to greater economic understanding, genuine marketing competitiveness between countries and truly fair international trade. The era of economic manipulation and conflict driven by outdated systems must give way to a more equitable and integrated global future. Till then the world should insist that the Trump tariffs can wait.