The Republican National Committee has released a 20-point presidential platform, with Donald Trump vowing to maintain the US dollar’s status as the world’s primary reserve currency. However, a former Treasury economist has raised concerns that Trump’s fiscal policies could weaken the dollar’s dominance.

What Happened: The 13th point in Trump’s presidential is a commitment to uphold the U.S. dollar’s position as the global reserve currency, but Mark Sobel, the U.S. chair of the Official Monetary and Financial Institutions Forum, has expressed concerns that a second Trump term could potentially weaken the dollar’s dominance, reported Business Insider.

He suggested that the real threat to the dollar’s dominance would not come from abroad but from a “severe deterioration” in the U.S.’ economic and financial conditions under Trump’s leadership.

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Sobel highlighted that Trump’s proposed large tax cuts and refusal to decrease Social Security or Medicare, along with plans for a universal tariff of 10% and mass immigration, could lead to less confidence in American leadership and enormous burdens on markets to finance a large supply of Treasuries.

Despite these concerns, Sobel does not foresee the dollar’s dominance significantly declining over the next four years, even if these conditions worsen. However, he warned that Trump’s policies could undermine his platform, stating, “Policy and actions speak louder than slogans.”

Despite the platform’s assertion that alliances will be strengthened under a Trump administration, Sobel questions whether the U.S. will remain a trusted partner, given Trump’s previous actions, such as threatening to leave NATO and withdrawing from key agreements.

Why It Matters: The potential impact of Trump’s policies on the economy has been a subject of concern. A top economist, John Higgins, has suggested that a robust AI stock rally fueling the stock market bubble could face an early burst if Trump wins the 2024 election, due to his proposed policies on tariffs and immigration

However, not all experts think likewise. A report by Barclays said Trump’s victory in the 2024 election may lead to a stronger dollar, with the currency potentially rallying 3% during a second Trump term. The report notes that every incremental 1% of GDP could add around 1% to 1.5% in upside for the U.S. Dollar.

Meanwhile, recent polls have indicated a challenging path ahead for Joe Biden. Biden is trailing Trump in all six swing states surveyed by Emerson College on behalf of Democrats for the Next Generation.

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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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