Republican Senator Mike Lee has warned that the United States has put the dollar’s position as the world’s reserve currency at risk.
In an interview with journalist and political commentator Tucker Carlson, Lee argued that the White House’s policies, specifically the use of unilateral sanctions, have undermined the rules-based international order that Washington claims to uphold.
Lee believes that these actions have inadvertently brought together Russia, China, and Iran, significant global economic players, and created a powerful incentive for these nations to move away from the dollar, particularly in energy transactions.
“And, in the meantime, we have really presented the first major threat that you and I have seen in our lifetimes to the US dollar as the world’s reserve currency,” Lee said, emphasizing that “twenty years ago all oil transactions, no matter where you are in the world,” were conducted in dollars.
“It’s starting to not be the case anymore,” he said, expressing concern that this trend was “very chilling,” as the strength and widespread use of the dollar has been a major benefit for the United States.
The shift towards countries using their own currencies in trade, rather than the US dollar, gained momentum after Russia, a leading oil producer and exporter, was cut off from the Western financial system and its foreign reserves were frozen in 2022.
“So, in the name of protecting the rules based on international order, we’ve weakened it, in the name of maintaining economic and military security for the US, we have made ourselves vulnerable,” Lee concluded.
The freezing of Russian sovereign assets in February 2022 was a historic move. Several Western experts, including US Treasury Secretary Janet Yellen, have warned against attempting to confiscate these funds, arguing that such actions could harm the dollar, the euro, and the entire global financial system.