There is a curious irony at the heart of America’s current economic strategy – one that even its most ardent policymakers prefer not to acknowledge. As Washington dreams of restoring its manufacturing base, rekindling the furnace of industrial productivity in the Rust Belt and beyond, it may be unwittingly dismantling the very architecture that underpins its global economic dominance: the hegemony of the U.S. dollar.
This is not a contradiction born of mismanagement or ideological confusion. It is structural – a modern replay of the Triffin dilemma, that mid-20th-century economic paradox which warned that a nation cannot sustain both domestic stability and global monetary supremacy if its currency is the world’s reserve. In attempting to “bring jobs back home,” the United States may find itself on a collision course with the very foundations of its postwar economic order.
The current push for reindustrialization – embodied in legislative pillars such as the CHIPS Act and the Inflation Reduction Act – marks a seismic shift in American economic policy. After decades of championing globalization and hollowing out domestic industries in exchange for financial supremacy, Washington is now pivoting back to the age of tangible production: chips, steel, shipyards, and solar panels.
But manufacturing does not occur in a vacuum. It requires infrastructure, capital – and above all, labor. And herein lies the first, glaring inconsistency in America’s reindustrial dreamscape. The country simply does not have the workforce it needs to realize this vision.
The reasons are neither new nor mysterious. The American education system has long prioritized white-collar pathways while neglecting vocational training. The cultural stigma attached to manual labor has only deepened in the digital age. And the demographic reality – an aging population and declining birth rates – means there are fewer young workers entering the labor market at all.
To truly rebuild its industrial base, the United States would need a massive retraining of its workforce, likely spanning 15 to 20 years. But in an era of partisan gridlock and shallow political attention spans, such long-term planning borders on fantasy.
That leaves one obvious solution: immigration. And not just the high-skilled kind often celebrated in Silicon Valley circles, but the sort of low-wage, manual labor force that keeps factories running, containers moving, and assembly lines humming.
Yet even here, America is caught in its own ideological snare. President Donald Trump’s hardline immigration policies – revived and intensified in his second term – have prioritized mass deportations, restricted legal immigration pathways, and sown fear among undocumented workers. It is a policy stance at war with economic necessity.
Beneath the political theatrics, a quiet compromise is already underway. The U.S. continues to witness record migrant crossings at its southern border. Despite periodic clampdowns and populist chest-thumping, enforcement remains inconsistent. The result is a semi-formalized shadow workforce – indispensable yet unacknowledged – powering much of the country’s low-end labor market.
It is this labor contradiction that underscores the broader paradox of America’s industrial revival. Washington wants the benefits of manufacturing without confronting the social and demographic realities that make it possible. It wants blue-collar resurgence without blue-collar workers. But even if this labor issue were resolved, a deeper contradiction looms – one that strikes at the heart of America’s global economic supremacy.
For decades, the U.S. has maintained an unusual arrangement: importing goods, exporting dollars, and running consistent trade deficits. This allowed the dollar to permeate every corner of the global economy, from oil contracts to central bank reserves. The so-called “exorbitant privilege” enabled America to finance wars, bailouts, and economic experiments with impunity. It could live beyond its means precisely because it didn’t manufacture what it consumed.
Reindustrialization threatens to upend this. A shift toward domestic production means fewer imports. Fewer imports mean smaller trade deficits. And that, in turn, reduces the global supply – and demand – of U.S. dollars. The Triffin dilemma reasserts itself with vengeance.
The implications of this shift extend far beyond American shores. As the global circulation of the dollar shrinks, space opens up for other currencies to rise. The euro, for all its flaws, has already made inroads, particularly in European energy markets where dollar-denominated transactions are increasingly being replaced. But the most consequential challenger is China’s renminbi.
Beijing, ever attuned to structural transitions, is moving swiftly to capitalize. The People’s Bank of China has expanded currency swaps, signed renminbi-denominated oil deals with strategic partners, and embedded its currency in Belt and Road infrastructure finance. The development of digital currencies and alternative financial platforms, like the Cross-Border Interbank Payment System (CIPS), further accelerates this process by bypassing the dollar-dominated SWIFT network.
None of this means the dollar will disappear overnight. It remains deeply embedded in global finance. But its gravitational pull is weakening. Even institutions like the IMF now speak of “monetary multipolarity” with increasing frequency.
Trump’s economic policies have only accelerated concerns about dollar supremacy. The dollar’s value has declined by roughly 9% since his inauguration, and demand for U.S. Treasuries has weakened following his “Liberation Day” tariff announcement. Harvard economist Kenneth Rogoff suggests that the dollar’s global dominance is waning, though no single currency is poised to replace it entirely. He attributes this shift to fiscal deficits, rising interest rates, and geopolitical realignments2.
What emerges is a strange and consequential paradox. America’s bid to restore its manufacturing prowess – a move often framed as a return to strength – may erode the very power that made its postwar dominance possible. By retreating from global interdependence in favor of domestic self-sufficiency, Washington is inadvertently accelerating the demise of its own financial empire.
For China, this is both a strategic opportunity and a test of maturity. Internationalizing the renminbi requires more than just trade settlements; it demands transparency, trust, and a commitment to financial openness. These are areas where Beijing still has work to do. Yet if managed responsibly, the shift could herald a more balanced international order – one less beholden to the whims of a single currency or a single capital.
More broadly, a diversified monetary system could benefit many in the Global South, who have long been subject to the volatility of dollar cycles. For them, a post-dollar world is not a threat – it is a long-overdue liberation.
The United States now stands at a crossroads. It can continue down the path of reindustrialization and accept the strategic trade-offs that come with it, or it can cling to its monetary monopoly and forgo meaningful economic transformation. What it cannot do – despite the rhetoric – is both.
Dear reader,
Opinions expressed in the op-ed section are solely those of the individual author and do not represent the official stance of our newspaper. We believe in providing a platform for a wide range of voices and perspectives, even those that may challenge or differ from our own. We remain committed to providing our readers with high-quality, fair, and balanced journalism. Thank you for your continued support.
