While Russia and China’s push to reduce the role of the US dollar in trade is catching on, don’t expect Washington to give up its global economic dominance without a fight, political expert Jack Rasmus, told RT.
The two countries’ presidents, Vladimir Putin and Xi Jinping, recently announced their intention to expand the use of their national currencies –the ruble and the yuan– in bilateral financial transactions. The two states have agreed to develop financial instruments for this purpose and signed an intergovernmental agreement to boost cross-currency settlements. Both are also working on their own alternatives to the globally recognized SWIFT payment system.
“It’s only at the very beginning and we’re talking about only two countries. They’re fairy large countries and it could be a significant amount of trade in non-dollar currencies or in kind,” Jack Rasmus, professor of political economy at Saint Mary’s College of California, told RT.
While Russia has already called on allied emerging economies –Brazil, Russia, India, China and South Africa (BRICS)– to develop settlement instruments in national currencies, the anti-dollar push will not go unnoticed and will face a response from Washington, according to the analyst.
“Dollar is still the global currency. I think it’ll be a fight with BRICS. The US won’t stand by and do nothing if BRICS join the China-Russia payment system,” Rasmus said. He added that if BRICS countries finally join Russia and China, Washington will definitely “take counter-actions overtly and covertly to discourage it.”
The analyst also believes the US is alienating other countries as it imposes sanctions whenever it wants to. However, sanctions can easily backfire, as countries will turn away from the US if it continues to use them as a political weapon, according to the expert.
“The use of sanctions is a short-term weapon….but, in the long term, it may come back and bite the US if it pushes too hard,” Rasmus noted. “If the US continues with strong-arming, with sanctions whenever it wants something from another country, then other countries are gonna move further in that direction.”
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