In high-level talks, there have been mentions of imposing penalties on countries that engage in bilateral trade using currencies other than the US dollar. Measures such as export controls, currency manipulation charges, and tariffs have been suggested as potential actions, as shared by anonymous sources familiar with the discussions. This comes against the backdrop of increasing dissatisfaction with the dollar's dominance in the global financial system, particularly following the US's imposition of severe economic sanctions on Russia, prompting a move towards de-dollarization.
The issue of de-dollarization gained momentum in 2022 when the US spearheaded efforts to impose stringent economic sanctions on Russia, constraining access to the dollar for various entities including Russia's central bank and government officials. As part of efforts to support Ukraine, President Joe Biden recently signed a law granting him expanded authority to seize Russian dollar assets, a move known as the REPO provision. This measure, integrated into a national security package, has raised concerns among some Republican lawmakers regarding potential repercussions on the role of the US dollar as the global reserve currency.