Yuan Overtakes Dollar amid Escalated US-China Trade Battle
DID Press: China’s yuan has, for the first time, surpassed U.S. dollar in global payment settlements, just as U.S. President Donald Trump announced 100% tariffs on all Chinese imports — a move analysts say marks the peak of an escalating economic confrontation between the world’s two big powers.
Global financial systems are witnessing one of the most significant shifts in decades. Official data show that yuan has overtaken the dollar in cross-border transactions and payments, signaling a historic challenge to dollar’s dominance in international trade.
According to figures, yuan’s share in China’s foreign trade payments has risen from near zero in 2010 to more than 53% today. The surge reflects Beijing’s long-term strategy to build independent financial networks, such as Cross-Border Interbank Payment System (CIPS), and to reduce reliance on the U.S.-led SWIFT network.
Experts say U.S. financial sanctions against Russia following the Ukraine war — and similar threats against China — served as a wake-up call for Beijing. In response, China expanded alternative payment systems, bilateral currency swap agreements, and local currency settlements with partners across Asia and the Middle East.
In a retaliatory move, Donald Trump announced Friday that the U.S. will impose 100% tariffs on all Chinese imports starting November 1, adding that the new duties will be “on top of all existing tariffs.”
The decision came hours after Trump threatened a “massive increase” in tariffs in response to China’s new export restrictions on rare earth minerals — critical materials for semiconductor, battery, and high-tech manufacturing industries. Beijing’s limits on these exports have added direct pressure on U.S. producers.
Analysts believe the twin developments signal a new phase in the U.S.-China confrontation — one that goes beyond trade disputes and now reaches into the core of the global monetary order. While Beijing seeks to erode dollar dominance through wider yuan adoption, Washington is turning to protectionist and tariff-based policies to defend its long-standing position.
Observers say “dollar-versus-yuan” clash is no longer just an economic rivalry but part of a broader geo-strategic struggle that will help define the balance of global power in the 21st century.