ASEAN’s De-Dollarization Move: Two Brutal Blows to the US Economy

The dollar's dominance is under siege—and Southeast Asia is leading the charge. Here's how ASEAN's pivot away from the greenback could leave the US economy reeling.

The liquidity crunch no one's talking about

When ASEAN nations ditch dollar reserves, they're not just diversifying—they're pulling the plug on America's cheap credit lifeline. Less demand for Treasuries means higher yields, and suddenly that $34 trillion debt pile gets a lot heavier to carry.

Trade wars 2.0: The currency edition

Local currency settlements between Jakarta and Bangkok might sound harmless—until you realize they're cutting Wall Street out of the transaction loop. Every bilateral deal bypassing SWIFT is another paper cut to US financial hegemony. (Bonus: Guess who still thinks the petrodollar is 'too big to fail'?)

The bottom line? When your exorbitant privilege starts looking like a liability, even 'stablecoins' begin to seem... well, stable.

Two Ways ASEAN’s De-Dollarization Move Could Injure the US Economy

1. Reduced USD Demand

The ASEAN bloc has long been discussing ditching the US dollar. The plan was already in motion, as the block had discussed multiple times, to target the multipolar currency agenda. At the same time, ASEAN has always been quite vocal about how it wants to reduce its reliance on the US dollar. A new development spurred by Trump’s fierce tariffs has now shaken ASEAN’s trust, compelling them to explore trade relations with China to protect themselves from the stark US tariffs. In this wake, China and Indonesia have already signed a bilateral deal to trade in local currencies, reducing their dollar dependence in one go.

This move, however, can end up jeopardizing the US dollar’s stance, as it could reduce the global demand for the USD, hampering its further progress. The reduced demand WOULD ultimately take a toll on the dollar, which has already shed nearly 10% of its value in recent times.

2. Declining US Economic Influence in the Region

Before the US dollar’s doom, ASEAN had strong economic ties with the United States. As Trump tariff hikes started to spread global mayhem, sparking trade war fears, ASEAN geared up to weather the change, pivoting towards China for help. If the US continues to deploy aggressive strategies, it will ultimately end up sabotaging the dollar’s supremacy in the region. This development may injure the US economy on a deeper level, reducing its influence in the global market.