The American Dollar: Challenges, Decline, and More
If you have tried to convert money in the last few weeks, then you are well aware of how weak the American dollar is, and it continues to fall in value with each passing day. But why is it so weak? What happened?
The current decline of the American dollar is mostly attributed to politics, though there are some economic issues as well. Read on to learn more about the challenges the American dollar is currently facing.
6 Reasons the American Dollar is Crashing
1. The Big Beautiful Bill
The Big Beautiful Bill (BBB) passed on July 3rd, 2025. Unfortunately, this bill, while harming the health and well-being of millions of Americans, also included adjusting the debt ceiling by $4 trillion. This alone caused many foreign entities who are currently holders of assets in USD to liquidate their holdings for fear of current inflation.
2. Trump's Tariffs
If the BBB weren’t enough, the tariffs Trump implemented in April 2025 have affected America’s economic posture on a global scale. Many businesses that used to do business with the United States have begun to look elsewhere, a trend that has led to economic decline rather than growth.
Not only that, but many businesses have lost faith in the American branches of government and have thus closed or significantly reduced their investments.
3. Lack of Travel to the United States
Ever since Trump’s inauguration, international travel to the United States has been on a steep decline. First, because individuals wanted to show solidarity with the American people, and later because visitors of all nationalities were being detained—including a German man (who was detained for 1 week when going to visit his American fiancé even though he holds an American green card) and a Canadian actress who was hired for an acting job in LA. In both cases, both individuals faced invasive and improper treatment before being released several days after their arrest.
This has only increased further, and many European countries have issued warnings about traveling to the US. This has cut significant revenue in the tourism industry, especially in states like Florida, New York, and California, which have many industries that rely on this revenue.
4. The US’ Credit Score Has Fallen
In previous decades, the US had a stellar credit score, which meant other countries were highly likely to lend the US money. However, the stellar ranking was removed in May 2025 after just 4 tumultuous months of Trump’s policies. Countries all over the world are now choosing to trade with more stable economies rather than the United States.
5. Americans Are Spending Less
Ever since Trump was elected, he has done nothing but cut jobs, government-sponsored programs, and benefits that the American people rely on. Though much of the middle class has retained their positions for now, the American people know more cuts are coming. As a result, spending has reduced as individuals plan to save for what could be a long winter with no job, no government help, and no positive economy.
With Americans saving more and putting more into assets like gold or Bitcoin, there is less being spent abroad and on products that come from abroad, which further pushes the debt cycle and other countries’ apprehension when it comes to accepting American dollars.
6. Other Countries Have Lost Faith in the USD
As all of this is probably hitting home with Americans, government entities around the world are watching, anticipating that the US dollar may collapse, and if that happens, it will no longer be the World Reserve Currency, as such, many of these governments have started asking how they can make money on the currency now before it happens.
Many countries are swapping USD without the bills returning to American soil. The most famous is China, which is reportedly unloading much of its USD supply on Brazil after the collapse of trade regulations in April.
That being said, some countries, namely Zambia, Ghana, and Pakistan, are benefiting from the low value of the US Dollar as they work to pay their debt off to the United States. Although that may help the US short term, it is unlikely other countries will continue to extend loans to the United States, lowering its global economic power in the future—something we think the government has neglected to consider.
As much as it pains us to say this, many countries now question the future of the United States because of the current state of the dollar and the current economic policies.
What Currencies Are Doing Well?
The decline of the US dollar has been a positive point for numerous other currencies, namely the Euro, which is at its highest point in several years. Some other currencies doing well (in comparison to the US dollar) are:
· Kuwaiti Dollar (KWD)
· Bahraini Dinar (BHD)
· Omani Rial (OMR)
· Jordanian Dinar (JOD)
· British Pound (GBP)
· Gibraltar Pound (GIP)
Many Middle Eastern currencies are on this list due to the consistent performance of the oil industry. The Gibraltar Pound can attribute its strength to being pegged to the Great British Pound.
Should You Be Worried About the US Dollar?
In general, the decline of a particular currency for any reason is never a good sign. Always, when countries begin to enter a downfall, it is always preceded by the devaluation of the local currency. While we don’t think the United States is going to fall anytime soon, we do think the decline of the USD is the first sign of the decline of the country.
We don’t have a crystal ball, and we can’t predict when the US will cease to exist, but we do think, without major reform, the US will have serious social problems in the next 50 years as the land becomes increasingly unfarmable due to global warming, and the people grow more and more hungry. The point is, the golden days of the US are over, and they aren’t coming back, and everything Trump is doing is only making things worse for the future of the country.
