China challenges US dollar hegemony global power

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‎By Caleb Ohaeri

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‎The United States (US) dollar has been the global reserve currency of the world since the end of World War Two (WWII) after the establishment of the Bretton-Woods agreement in 1944 by the Ally forces when it was obvious that Nazi Germany and the Axis forces were defeated and victory was in the horizon.

The agreement mandated that countries fix the value of their currency in terms of the US dollar, which was then pegged to a specific price of gold (USD 35 per ounce).

This created a relatively stable system of exchange rates. The unanimous decision in unison of about eleven countries of which China was a signatory too went on to accelerate the formation of the United Nations(UN), the International Monetary Fund( IMF), World Bank and placed the US Dollar at the top of the food chain.

The USD makes up 49% of global financial trade which makes it the most widely used while the Chinese Yuan makes up 4.8% which makes it the 4th most widely used after the EUR and GBP.
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‎Since the inauguration of Donald J Trump as the 47th President of the US on January 20th, 2025,  the global economy has been thrown into a quagmire with the announcement of tariff charges on various countries. Lots of countries are being affected and seeking to negotiate a deal with President Trump to reduce the tariff. 

The US also slammed tariff charges up to about 145% on goods imported from China which opened up a new trade war like never seen in the past fifty years even during the Cold War of 1949-1991 between the US and the Soviet Union, with China also reciprocating with similar tariff charge.
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‎Since the 1990s, China has gone on to be an economic powerhouse both economically and taking over most business trading partners of the US.

Through the BRICS channel and China being one of the founding members of the trade bloc has announced it will be promoting the use of its payment system dominated by the Yuan for international trade and transactions.

With the addition of more countries to the BRICS alliance hereby increasing its foothold and share of the global population and global trade and with more countries aggressively and unequivocally adopting the De-dollarization process notable with China and Russia sideling the US dollar and resorting to their national currencies.

About 90% of trade between both countries as well as other superpowers adopt the same process. Such a move poses a direct threat to the US status as the reserve currency of the world.
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‎History will show that ultimately the demise of US hegemony and USD boiled down to one word, Trust.

When that evaporates, empires begin the slow march to their eventual collapse. Loss of trust comes via arrogance, ignorance and treating the very people who made your empire with disdain.
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‎Geo-political tensions are rising, Ukraine- Russia conflict, the Isreal- Gaza war, the trade war between China and recently nuclear negotiation between the US and Iran, can we be looking at a transition from a unipolar world order to a multipolar base order that pitches world powers against each other also aligning as well in a bid to pursue national interest.