{"id":1909319,"date":"2023-04-03T20:10:59","date_gmt":"2023-04-04T00:10:59","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/chinas-brazil-deal-could-topple-us-dollar-in-region-create-supply-chain-bottlenecks-analysts\/"},"modified":"2023-04-03T20:21:50","modified_gmt":"2023-04-04T00:21:50","slug":"chinas-brazil-deal-could-topple-us-dollar-in-region-create-supply-chain-bottlenecks-analysts","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/chinas-brazil-deal-could-topple-us-dollar-in-region-create-supply-chain-bottlenecks-analysts\/","title":{"rendered":"China\u2019s Brazil Deal Could Topple US Dollar in Region, Create Supply Chain Bottlenecks: Analysts"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">28<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fchinas-brazil-deal-could-topple-us-dollar-in-region-create-supply-chain-bottlenecks-analysts%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1909319&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47-->\n<div class=\"post_content\">\n<div class=\"aplayer_app\" data-source=\"https:\/\/vs1.youmaker.com\/assets\/2023\/0403\/3259556c-2368-4917-9fb3-c3c0525b85a1\/audio.mp3?length=5920461&#038;duration=493\"><\/div>\n<\/p>\n<p>On March 29, Brazil announced that it would start using local currency and China\u2019s yuan for financial transactions between the two nations. While pragmatic on the surface, some say the move indicates China\u2019s push to end the U.S. dollar\u2019s dominance, particularly in the Americas.<\/p>\n<p>According to analysts, the combined effect of China&#8217;s increased demand for commodities from Brazil, including corn and soybean requirements, which are driving Brazil to export record volumes in 2023, as well as the decision to shift towards the yuan, suggests a serious economic threat to the United States.<\/p>\n<p>Analyst Alex King, founder of Generation Money and former vice president of finance in trade and working capital at Barclays Bank, stated, &#8220;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.&#8221;<\/p>\n<p>As per the International Monetary Fund (IMF), the global amount of U.S. currency reserves declined below 59% in the final quarter of 2021 due to the rising trend of reducing dependency on the dollar for trade. In recent months, countries like Argentina, Brazil, and Bolivia have struggled with depleted U.S. dollar reserves.<\/p>\n<p>China&#8217;s establishment of a bank in Chile in 2015 to boost yuan reserves and create a path for distribution and use throughout the region has been followed by the signing of a memorandum to establish a similar arrangement and a yuan clearing facility in Brazil this year. This has positioned China as the dominant trade partner and money lender in the region, giving China influence over the terms of its agreements. Venezuelan media outlet teleSUR claims that China has been negotiating agreements in yuan throughout Latin America since 2021.<\/p>\n<p>Analysts warn that if major suppliers such as Brazil move away from using the dollar, it could mean a price hike in commodities. \u201cThis would mean imports into the United States from Brazil and other commodity exporters potentially becoming more expensive over time, which could lead to food price inflation,&#8221; said King.<\/p>\n<h2>China\u2019s Initiative to End \u201cDollarization\u201d and Develop Alternative Reserve Currency<\/h2>\n<p>Talk of ending dependency on the dollar for trade has been gaining traction over the past year due to inflation and depleted U.S. foreign currency reserves. The push to end \u201cdollarization\u201d is especially prevalent among Brazil, Russia, India, China, and South Africa, known as the trade bloc BRICS.<\/p>\n<p>During the BRICS Business Forum last year, Russian President Vladimir Putin said member states were working toward developing a new global reserve currency as an alternative to the IMF\u2019s Special Drawing Right. In January, Brazilian President Luiz In\u00e1cio Lula da Silva announced a joint initiative with Argentina to establish a common trade currency for the two nations as both countries suffer from drastically depleted U.S. dollar reserves and local currency devaluation.<\/p>\n<h2>Impact of De-Dollarization<\/h2>\n<p>Aaron Alpeter, the founder of Izba and Capabl and with years of experience in supply chain management and logistics, believes that the U.S. dollar&#8217;s use as the world\u2019s reserve currency is like a \u201csuper weapon,\u201d but it may not be for long. Alpeter stated, &#8220;The risk isn\u2019t in a decline in the demand for dollars due to commodities. It\u2019s a potential and sudden loss of countries outside the United States abandoning the dollar.&#8221;<\/p>\n<p>If multinational abandonment of the U.S. dollar occurs, there could be a sudden surplus of available currency that could make the U.S. dollar next to worthless and the U.S. debt undesirable. Other countries have faced similar economic consequences due to excessive circulation of currency, resulting in hyperinflation in countries such as Venezuela and Argentina. Analysts argue that the Americas is a critical proving ground for China&#8217;s goal of global dominance, considering that the region represents an &#8220;agro-industrial superpower&#8221; that exports 25% of all its agricultural products, including some of the top minerals.<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>On March 29, Brazil\u2019s government announced\u00a0it would start using local currency and China\u2019s\u00a0yuan for financial transactions between the two nations. While pragmatic on the surface, some say the move indicates China\u2019s push to end the U.S. dollar\u2019s dominance, particularly in the Americas. The decision occurred in lockstep with Beijing\u2019s increased demand for commodities from the<\/p>\n","protected":false},"author":334,"featured_media":1909320,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[4504,23472,4403,14261,5909,9789,3715,14169,8139,11410,21214],"class_list":["post-1909319","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times","tag-analysts","tag-bottlenecks","tag-brazil","tag-chain","tag-chinas","tag-create","tag-deal","tag-dollar","tag-region","tag-supply","tag-topple"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1909319","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/334"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1909319"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1909319\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1909320"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1909319"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1909319"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1909319"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}