In recent times, there is growing evidence that US allies are trying to weaken the hegemony of the dollar. In his Washington Post article, analyst Fareed Zakaria explained what lies behind the decision of different countries, including France and Germany, to undermine the position of the US currency.
Fareed Zakaria recalled that last week Heiko Mass, Germany’s foreign minister, who is one of the closest US allies, went to Iran and said that a European payment system would soon be created as an alternative to the system based on the dollar.
The visit was carried out jointly with the United Kingdom and France, which also contributed to the creation of the mechanism known as INSTEX (Trade Exchange Support Facility) – a mechanism for bilateral transactions with Iran that allows circumvention of US sanctions, reopened with Washington’s unilateral exit from the Iranian nuclear deal.
While it is difficult to end the dominance of the dollar in global transactions, which brings huge benefits to the US, the creation of INSTEX represents a warning sign, a kind of harbinger of imminent catastrophe: US allies are trying to undermine the fundamental pillar of power of the United States.
According to the analyst, this is happening because Washington abuses this power. While the US continues to outperform the world from an economic standpoint, profound structural changes are underway that are undermining its status, for example China’s development. In addition, there are other processes that represent a response to US abuse of power hegemony.
Zakaria stressed that Germany, France and the United Kingdom are signatories to the Joint Comprehensive Action Plan (JCPOA) 2015, known as the Iranian nuclear agreement. In deciding to unilaterally abandon the deal last year – although Tehran has fulfilled its commitments – the US has reintroduced sanctions against Tehran using the dollar’s power to prevent other countries from doing business with Iran because most international transactions are carried out in dollars. In fact, this abuse of authority made Europeans decide to create their own payment system.
In addition to European countries, other countries such as Russia, China and India want to create their own payment mechanisms to avoid resorting to the dollar, the analyst emphasized.
One more example of Washington’s abuse of power is the introduction of tariffs on exports to the US under the pretext of national security.
The author stresses that the US continues to occupy a unique position in the global arena. However, there is growing evidence that the world is becoming increasingly multipolar.
“The US administration is working to achieve some short-term gains by limiting transactions with other countries. But by abusing its power to do so, it puts at risk the structure of the international system in which US power is It is a bad deal for which all Americans will pay a price in the coming decades,” concluded Zakaria.