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ASEAN Nations Eye Alternatives to the US Dollar Amid Trump’s USD Revival Plan

The US dollar has been strengthening following Donald Trump’s win as the 47th President of the United States, with his promise to combat de-dollarization and bolster the greenback’s global dominance. However, this renewed push for a stronger USD may come at a significant cost to other economies, particularly those in the ASEAN region. As the dollar surges, ASEAN nations may increasingly look for alternatives, especially in light of growing concerns over the weaponization of the USD and rising US debt.

ASEAN’s Growing Shift Away from the US Dollar

ASEAN countries have already made notable strides in exploring other currencies, especially the Chinese Yuan, as a viable option for trade. In fact, trade between ASEAN and China has been rising steadily, with ASEAN accounting for 15% of China’s total trade in 2023, up from 10% in 2010. The growing influence of China in the region is further underscored by the Regional Comprehensive Economic Partnership (RCEP), which includes 15 Asia-Pacific nations and is set to deepen economic integration.

Amid this shift, ASEAN nations are becoming increasingly vocal about reducing reliance on the US dollar, citing concerns over its weaponization, especially after the sanctions imposed on Russia. Indonesian President Joko Widodo has been outspoken on this issue, advocating for nations to embrace local currencies in trade and reduce their dependence on the USD.

Also Read: Russia Approves 15% Crypto Tax – What It Means For BRICS’ De-Dollarization And Crypto Economy With Global Trade Implications

The Potential Impact of Trump’s Stronger USD

President-elect Trump has vowed to reignite the strength of the USD, including by imposing taxes on countries that move away from the dollar. However, experts warn that this strategy may backfire. A stronger USD could make it more expensive for nations to access the dollar, leading borrowers to seek alternative currencies.

Economists at Allianz have pointed out that if access to the USD becomes costlier, nations may accelerate their search for alternatives, undermining the dollar’s role as the dominant global reserve currency. ASEAN countries, in particular, may be among the first to explore new options.

Ten ASEAN Nations at Risk of Moving Away from the USD

As the region looks to diversify its currency use, the following ASEAN nations are most likely to explore alternatives to the US dollar:

Brunei
Cambodia
Indonesia
Laos
Malaysia
Philippines
Singapore
Thailand
Vietnam
Myanmar

These nations, which are already exploring stronger economic ties with China and other partners, could accelerate their efforts to adopt alternative currencies, reducing their dependence on the US dollar.

The Future of ASEAN and Global Currency Dynamics

As ASEAN nations continue to integrate their economies, the possibility of a move away from the US dollar seems increasingly likely. While the US may seek to revive the greenback, the changing dynamics within the region could spark a broader shift in global trade and currency use. The ongoing de-dollarization efforts and the rise of alternative currencies, such as the Yuan, could significantly alter the balance of power in global finance.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.