Former US Treasury economist and Chairman of Official Monetary and Financial Institutions Forum (OMFIF) in the US, Mark Sobel, believes that President Trump's reelection could pose a threat to the global dominance of the US dollar.

Last week, the Republican National Committee released President Trump's campaign platform, outlining 20 principles that will guide Republican policy directions. In the 13th principle, Trump pledges to maintain the US dollar's status as the world's primary reserve currency.

However, Sobel argued in an article he authored that Trump's potential second term might weaken the dollar's dominance. He emphasized that any threat to the dollar would likely stem not from external factors but from severe deterioration in the US economy and financial conditions, potentially exacerbated by fiscal imprudence under Trump's leadership.

Sobel noted that while the dollar's dominance remains entrenched, the platform and policies under Trump imply reduced confidence in US leadership, weakened macroeconomic management, and significant burdens on the market from financing large amounts of US debt.

Using fiscal policy as an example, Sobel suggested that controlling debt levels over the coming decades would require abandoning massive deficits. However, Trump has promised large-scale tax cuts without cutting social security or Medicare. He has also pledged to implement a 10% universal tariff, which most economists believe could lead to inflation.

Additionally, Sobel pointed out that a large-scale immigration restriction plan is expected to slow US economic growth, putting pressure on the stability of the dollar, although insufficient to create an opportunity for other currencies to replace it.

Furthermore, if geopolitical tensions continue to escalate, there could also be a reduction in dollar reserves.

During his first term, Trump threatened to withdraw from NATO and withdrew the US from the Iran nuclear deal, the Paris Climate Agreement, and the Trans-Pacific Partnership. Consequently, he has employed sanctions more frequently than Biden, a key reason why other countries are seeking de-dollarization.

Nevertheless, Sobel believes that the dollar's dominance will not significantly decline in any form over the next four years, but Trump's actual policies could weaken the "global dominance of the dollar."