Why is...US Dollar Hegemony under Threat?

Show notes

What happens to the global financial order when the world starts losing faith in the US dollar - and in the United States itself? In this episode, host Polly Pallister-Wilkins speaks with Tobias Pforr (University of Copenhagen) and Fabian Pape (University of Edinburgh) about how the Second Trump administration is undermining the dollar’s hegemony. Tobias Pforr is a political economist and Postdoctoral Researcher at the Employment Relations Research Centre in the Department of Sociology at the University of Copenhagen. His research bridges political economy, philosophy, and public policy, and he has held positions at the European University Institute, the University of Reading, and the University of Warwick. Fabian Pape is a political economist and Leverhulme Early Career Fellow at the University of Edinburgh, researching the US Treasury market as a source of geopolitical and financial power. Drawing on their recent article, co-authored with Johannes Petry, Senior Researcher at Goethe University Frankfurt, “Dollar Diminished: The Unmaking of US Financial Hegemony Under Trump” (2025), they discuss how eroding trust in US leadership threatens the dollar’s dominance as a trade, reserve, and investment currency, what this means for the liberal international order, and why this moment differs from past crises. The conversation also touches on what an “interregnum” in global finance might look like, and the implications for Europe and global stability.

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Pape, F. 2022. Governing Global Liquidity: Federal Reserve Swap Lines and the International Dimension of US Monetary Policy. New Political Economy 27 (3):455–72.

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Pforr, T., Pape, F., & Murau, S. (2022). After the Allocation: What Role for the Special Drawing Rights System? Institute for New Economic Thinking . Working Paper No. 180

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