Worldwide Financial Planning

With his typical hyperbole, Donald Trump hailed the agreement as a “great” and “comprehensive” deal and US markets welcomed signs that the most punishing tariffs may be avoided. But investors in UK equities appeared to be less enthusiastic as the hastily arranged agreement leaves a lot unresolved.

While the West has used the dollar to punish and persuade in the past, China has been quietly laying the groundwork for a world where the dollar is no longer needed by them.

Despite a large number of companies raising concerns about tariffs, investors in US equities have been in positive mood as the S&P 500 and many other major equity indices ended April very close to where they started.

Last week, I covered how the dollar was used as a weapon and ‘geopolitical tool of compliance, punishment and hierarchy’, and this week I’ll turn to the exodus which followed and is following. If freezing $300 billion in a country’s sovereign assets was the warning shot, the world has since responded, not in protest, but in action.

After a wild round-trip, markets are heading back to where they were at the start of the month, before Trump’s ‘liberation day’ tariffs sparked the sell-off. But not much has significantly changed – US imports are now subject to 10% tariffs, while the more punitive rates are suspended, not cancelled.

In itself, it’s a two-part sub-series – the problems of weaponization, and then what they are doing about it, but it’s very important in the overall understanding of the future of the dollar and the motivation and where we might one day find peace. Long sigh.