You have seen the headlines about trade wars, tariffs and the looming digital dollar. The US is no longer playing passive enabler to global imbalances. The rules of global trade are being rewritten – with the US retaking control.
Capital, not just trade
Nations with a trade surplus do not just export goods – they recycle their earnings into US assets, bidding up prices for real estate, stocks and government debt. This artificially supports the dollar while weakening the export competitiveness of the US and fuelling inequality through asset inflation.
By imposing tariffs and shifting the terms of capital access, the US is breaking this loop – this is where global trade and finance intersect.
US President Donald Trump’s proposed Treasury-backed digital dollar is not about crypto speculation – it is about geopolitical leverage. It gives individuals in countries with capital controls (such as China) direct, legal access to US dollar.
Currently, China limits individuals to $50,000 (£37,550) a year in foreign exchange. But a digital dollar bypasses that. Even small flows – $1,000 from millions of users – become systemic over time.
That means:
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Untraceable capital flight
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More demand for US Treasuries and dollar-backed instruments
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More control over who accesses dollars
It is not just money. It is monetary architecture.
Additionally, the US holds the largest official gold reserves in the world –8,133.5 metric tonnes. ($816bn)
China holds approximately 2,280 metric tonnes ($209bn) – about 28 per cent of the US total.
But the US has an estimated 18,000 metric tonnes of undiscovered gold – exceeding $1.8tn.
While not directly backed by gold, the digital dollar is implicitly strengthened by the US’s vast gold reserves. In a world where digital currencies challenge fiat trust, the perception of hard backing matters.
What it means for investors
1. Surplus economies will reflate and capital will flee
Tariffs will force monetary easing abroad. Lower rates in China, Europe and other surplus nations weakening their currencies and pushing savers towards higher-yielding, more secure dollar assets. Expect:
This creates long-term support for dollar-linked investments, regardless of US deficits.
2. Chinese and Chinese proxy exposure carries exit risk
As outflows rise, expect Beijing to tighten capital controls. That raises red flags for:
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Chinese American depositary receipts – representing shares issued by Chinese companies and traded on the US stock exchanges
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Private equity deals
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Local-currency debt and fund flows
It is no longer a question of what is the upside? – more a question of can I get out if I need to?
3. Sectors drive returns – more than the stock
Roughly 50 per cent of equity returns come from sector, not individual company selection. That matters more than ever.
Strategic sectors include:
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Domestic semiconductors
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Defence and national security-linked contractors
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Utilities, infrastructure and energy tied to reshoring – bringing production back to your shores
At-risk sectors include:
The old macro map is obsolete
Old: Tariffs → US inflation → Federal Reserve hikes → Higher yields → Lower risk assets
Now: Tariffs → Foreign easing → Capital flight → Stronger dollar → Lower US yields
The US exports stagnation . . . and imports global capital.
Real assets are no longer optional
In a world of sticky inflation and falling interest rates, real assets become essential.
Energy infrastructure, gold, farmland, lithium and timberland gain strategic value (tangible, productive and politically protected)
Digital dollar
As more users adopt the digital dollar:
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dollar demand broadens;
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shadow capital flows formalise;
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US gains control over digital foreign exchange traffic;
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this deepens dollar liquidity while weakening foreign capital controls.
The new playbook
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Cash = optionality
Cash is no longer dead money. In a world of policy volatility, it is tactical ammunition. -
Domestic capacity > global exposure
Invest in businesses embedded in strategic sectors, not stretched across fragile geographies. -
Fintech and infrastructure benefit
Digital dollar infrastructure providers and US-aligned stablecoin platforms could emerge as long-term winners. -
China/China proxies = fragile exposure
Investors must treat China like a market with asymmetric risk. The upside is capped; the downside is regulatory. -
India
Not a shortcut, but a strategic counterweight.
Under a 10 per cent across-the-board import tariff, Indian goods will be subject to the same baseline.
India’s exports to the US are nearly $100bn annually. These include:
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Pharmaceuticals
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Textiles and apparel
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IT hardware
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Machinery
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Auto components
In short, India is invested in the current system – but exposed to the next one.
Opportunity: India as a strategic counterweight
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A geopolitical counterweight to China
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A member of the Quadrilateral Security Dialogue – along with Australia, Japan and the US – and a growing defence partner
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A democratic, large-scale economy that still welcomes US investment and technology
In the context of so-called friendshoring – shifting business to allies – and the realignment of global manufacturing, India could emerge as:
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a preferred production hub for the US and Europe;
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a consumer-led growth story, not just an export economy;
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a pillar in an alternative trade architecture – especially if digital trade and bilateral ties deepen.
Final thoughts:
From 1990–2020, the global financial system benefited:
The system of 2025–2035 will advance:
This is not about fear. It is about foresight.
This is not just about volatility. It is about velocity and positioning for power in a rewired world.
The passive era is over. The rules are changing – it is a regime shift – with consequences for every asset class.
Mark Clubb is the executive chairman of TEAM Asset Management.