Defending Dollar Supremacy May Be Next Phase Of US–China Trade War

The US-China trade war is shifting towards a monetary standoff, with Beijing promoting the internationalization of the yuan to challenge the US dollar's dominance. China's central bank has expressed concerns about the politicization of traditional cross-border payment systems and is seeking to expand the use of the yuan in alternative payment systems. Economists believe that the next phase of the US-China competition will involve financial sanctions and countermeasures. The BRICS bloc, led by China and Russia, is seen as a credible threat to the US dollar's status as the global reserve currency. The US has imposed tariffs on BRICS member countries, which has led to a joint statement criticizing tariffs from the bloc. Trump has threatened to impose additional tariffs on countries aligning themselves with BRICS, citing their anti-American policies. The ongoing trade negotiations between the US and China involve China trading its rare earths for US chips and opening up its service industry to the US. The US has made significant strides in reducing its dependence on China for rare earths, and Beijing is exploring further opening up its service industry as a bargaining chip. The US dollar's status as the global reserve currency is crucial, as any diminishing of its role could lead to the nation's default, and China holds a significant amount of US Treasury bonds. The CCP is aware of the US's vulnerability and has been working to replace the US dollar with the yuan, launching its own cross-border interbank payment system in 2015.