On March 29, Brazil’s government announced it would start using local currency and China’s yuan for financial transactions between the two nations.
While pragmatic on the surface, some say the move indicates China’s push to end the U.S. dollar’s dominance, particularly in the Americas.
The decision occurred in lockstep with Beijing’s increased demand for commodities from the South American nation. China’s corn and soybean requirements are driving Brazil to record export volumes in 2023.
It’s a combo effect that supply chain and financial insiders say could have serious economic consequences for the United States.
“Countries such as Brazil and China are keen to reduce their reliance on U.S. dollars for trade and, if this trend is sustained, it could lead to a depreciation in the value of the U.S. dollar as a result of lower demand for it,” analyst Alex King told The Epoch Times.
King is the founder of Generation Money and the former vice president of finance in trade and working capital at Barclays Bank. He says “de-dollarization” is a theme of increasing relevance globally.
Read more: China’s Brazil Deal Could Topple US Dollar in Region, Create Supply Chain Bottlenecks