This article appears in the Summer 2025 print issue of FP. Read the full roundup or explore more from the issue.

This article appears in the Summer 2025 issue of Foreign Policy. Subscribe now to support our journalism.

In terms of shaking up the global exchange rate system, there is little question that Richard Nixon serves as the closest analogy to Donald Trump in his second term. Nixon’s decision to suspend the convertibility of U.S. dollars into gold on Aug. 15, 1971, upended the global monetary system and presaged a disastrous decade of high inflation, low growth, and the weakening of the dollar as European countries delinked from the U.S. currency. Although the final chapter is yet to be written on Trump’s international economic policies, the uncertainty triggered by his tariff war suggests a high risk that the dollar, inflation, and growth will once again be casualties. This time, it will be a renminbi bloc—China and the many countries for which it is the major trading partner, particularly in East Asia but also in Latin America and Africa—that separates from its tight links to the dollar, with the already existing euro bloc gaining market share at the dollar’s expense. Cryptocurrencies are already eroding the dollar’s preeminence in the underground economy, which represents perhaps much as 20 percent of global income.

To be fair, both Nixon and Trump were facing challenges to the status quo for the dollar even before they decided, each in their own way, to blow things up. When Nixon became president in 1969, the dollar had been riding high for 25 years since the Allied powers agreed to a new exchange rate framework in a historic 1944 meeting in Bretton Woods, New Hampshire. (The meeting also led to the creation of the World Bank and the International Monetary Fund.) Famously, British delegate John Maynard Keynes proposed a supranational currency, the bancor, as an alternative to the dollar but was beaten down by the Americans, who were, after all, holding all the cards given that the U.S. economy towered above all others by the end of World War II.

In terms of shaking up the global exchange rate system, there is little question that Richard Nixon serves as the closest analogy to Donald Trump in his second term. Nixon’s decision to suspend the convertibility of U.S. dollars into gold on Aug. 15, 1971, upended the global monetary system and presaged a disastrous decade of high inflation, low growth, and the weakening of the dollar as European countries delinked from the U.S. currency. Although the final chapter is yet to be written on Trump’s international economic policies, the uncertainty triggered by his tariff war suggests a high risk that the........

© Foreign Policy