President Donald Trump’s dramatic so-called ‘Liberation Day’ rollout of universal tariffs could signal the beginning of the end of the US dollar’s status as the ultimate safe-haven currency, the CEO of a leading financial advisory has warned.
Trump has vowed to pull the trigger on Wednesday and impose an unprecedented barrage of tariffs on goods from overseas that he claims will fund an extraordinary revival of the United States.
“The sweeping, universal tariffs on all US imports, unveiled in a defiant announcement from the White House, marks a sharp escalation in global trade tensions and a radical departure from decades of open-market policy,” noted deVere Group’s Nigel Green.
“The dollar may spike in the short term, as investors react to the shock by retreating into what they think is safety,” he said.
“But the nature of this ballooning crisis is different. The threat is coming from inside the US, and the dollar’s safe-haven status might not hold under sustained inflation, weakening real yields, and growing distrust in American economic leadership.”
Green explained that universal tariffs reduce imports, and by extension, the demand for foreign currencies. That can lift the dollar — at least mechanically.
In the early stages of the announcement, the dollar strengthened against emerging market currencies and commodity-linked peers, as global risk aversion took hold.
“Investors tend to reach for the dollar reflexively when things get rough. But this is a fundamentally inflationary policy that undermines the dollar’s long-term strength,” said the deVere chief executive.
He added that tariffs will raise costs on a broad swathe of consumer and industrial goods, feeding into higher prices across the board.
“Trump is also aggressively lobbying for interest rate cuts. So, we’re looking at a weaker growth outlook combined with rising prices and political pressure on the Federal Reserve to stay dovish. That’s a textbook setup for dollar weakness over the medium term.”
Status built on trust
The dollar’s reserve currency status is built not just on the size of the US economy, but on trust: trust in its institutions, in the rule of law, and in its commitment to relatively open trade. Blanket tariffs attack that foundation directly.
“If the world begins to see the US as an unreliable trading partner, or one that uses its currency and economic size as a weapon, that changes everything,” Green noted.
“We could be witnessing the early stages of global moves away from the dollar as the ultimate safe-haven currency.”
Already, there are signs of strain. Central banks in China, Russia and parts of the Middle East have been gradually reducing their reliance on US Treasuries. The rise of digital currencies and bilateral trade agreements in non-dollar denominations further suggest a slow but real shift in the world monetary order.
As retaliation builds from Europe, China and other major economies, the dollar could come under sustained pressure.
“Investors must position accordingly. Holding only USD-based assets or assuming the dollar will always outperform in a crisis is no longer a viable strategy.”
The deVere CEO concluded that this could be an historical turning point for the US currency.
“Tariffs will bite. Inflation will rise. And if the rest of the world sees the US abusing its monetary power and abandoning open trade principles, the shift away from the dollar will accelerate.”