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The Dollar is Slowly Losing its Status as the Primary Reserve Currency

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The Dollar is Slowly Losing its Status as the Primary Reserve Currency

The Dollar is Slowly Losing its Status as the Primary Reserve Currency

The dollar has been a stalwart of international trade over the majority of the last century. Around the time of the formation of the Eurozone, it reached its recent peak at 71.0% of official foreign exchange reserves. Since then, its composition of global reserves has more recently dropped to a more modest 62.9% in 2014.

However, the dollar is slowly losing its status as the world’s undisputed reserve currency. This is not an unusual event as far as history goes. In fact, about every century or so since the Renaissance, the global reserve currency has shifted. Portugal, Spain, The Netherlands, France, and Britain have had dominant currencies at different times.

Today’s infographic shows that the wind is shifting in international trade. With less countries and organizations using the dollar to settle international transactions, it slowly chips away at its hegemony of the dollar. China is at the epicenter and the country is making continued progress in cutting deals outside of the U.S. dollar framework. Deals shown in the graphic are currency flows between countries that have abandoned the dollar in bilateral trade, as well as countries that are considering such measures.

The most recent culmination of these trends is the creation of the Asian Infrastructure Investment Bank (AIIB), a China-led rival to the World Bank and IMF that includes 57 founding countries and $100 billion of capital. The United States is not a member and has actively lobbied its allies to avoid joining due to perceived governance issues.

Other recent deals by China include: a 30-year $400 billion energy alliance with Russia, a second energy deal focusing on natural gas worth $284 billion with Russia, and a deal removing tariffs on 85% of Australian commodity exports to China. Further, China and Russia have agreed to pay each other in domestic currencies in order to bypass the U.S. dollar.

It is not only the Chinese that are starting to question the viability of the dollar. A report in 2010 by the United Nations called for the abandonment of the U.S. dollar as the single reserve currency. The Gulf Cooperation Council has also expressed desires for an independent reserve currency.

In the short term, especially with a crashing Chinese stock market and fledgling Eurozone, the dollar will likely reign supreme. It’s still a stretch for the yuan to make its way into foreign reserve coffers so long as capital controls remain in place and the country’s bond market is not open or transparent to offshore investors. However, Beijing is currently mulling ways to internationalize the yuan, and each step it takes will take China closer to challenging dollar hegemony.

With more bilateral trade transactions bypassing the dollar, and the increasing internationalization of the Chinese financial system, the yuan is eventually going to give the dollar a run for its money.

Original graphic by: Sputnik

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Visualizing the Major Product Exported by Each U.S. State

Canada is the top destination for products from 21 states.

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Graphic showing product categories each state exports worldwide.

Visualizing the Major Product Exported by Each State

The U.S. is the second biggest exporter in the world, accounting for over 8% of global exports.

In this graphic by NeoMam Studios, we analyze the primary product exported by each state, as well as its main destination, utilizing data from the U.S. International Trade Administration.

Canada: The Primary Destination

Canada serves as the largest export market for most of the Midwest, while Mexico holds the top spot as the export destination for much of the Southwest and Southeast. Additionally, Canada stands out as the primary importer of products from 21 states, with China and Germany trailing behind as notable destinations.

StateDestinationTop Product ExportedValue (USD)
Alabama🇩🇪 GermanyTransportation equip.$3,649M
Alaska🇨🇦 CanadaMinerals$576M
Arizona🇲🇽 MexicoMinerals$1,760M
Arkansas🇨🇦 CanadaProcessed Foods$246M
California🇨🇦 CanadaComputer & Electronics$5,093M
Colorado🇰🇷 South KoreaProcessed Foods$545M
Connecticut🇩🇪 GermanyTransportation equip.$1,581M
Delaware🇰🇷 South KoreaAppliances$419M
Florida🇬🇧 UKChemicals$2,447M
Georgia🇨🇦 CanadaMachinery$1,629M
Hawaii🇭🇰 Hong KongTransportation equip.$68M
Idaho🇹🇼 TaiwanComputer & Electronics$394M
Illinois🇨🇦 CanadaTransportation equip.$4,517M
Indiana🇨🇦 CanadaTransportation equip.$6,561M
Iowa🇨🇦 CanadaMachinery$1,598M
Kansas🇲🇽 MexicoAgricultural$1,543M
Kentucky🇨🇦 CanadaTransportation equip.$3,630M
Louisiana🇨🇳 ChinaAgricultural$11,300M
Maine🇨🇦 CanadaOil & Gas$504M
Maryland🇫🇷 FranceTransportation equip.$949M
Massachusetts🇨🇳 ChinaMachinery$1,298M
Michigan🇨🇳 ChinaTransportation equip.$15,361M
Minnesota🇨🇦 CanadaPetroleum & Coal$2,787M
Mississippi🇵🇦 PanamaPetroleum & Coal$2,106M
Missouri🇨🇦 CanadaTransportation equip.$2,390M
Montana🇨🇦 CanadaMinerals$153M
Nebraska🇲🇽 MexicoAgricultural$933M
Nevada🇨🇭 SwitzerlandMetal$1,399M
New Hampshire🇩🇪 GermanyTransportation equip.$695M
New Jersey🇨🇦 CanadaChemicals$2,734M
New Mexico🇲🇽 MexicoComputer & Electronics$2,014M
New York🇨🇭 SwitzerlandMetal $18,262M
North Carolina🇨🇳 ChinaChemicals$4,312M
North Dakota🇨🇦 CanadaPetroleum & Coal$1,441M
Ohio🇨🇦 CanadaTransportation equip.$5,990M
Oklahoma🇨🇦 CanadaMachinery$418M
Oregon🇨🇳 ChinaComputer & Electronics$6,261M
Pennsylvania🇨🇦 CanadaChemicals$2,280M
Rhode Island🇮🇹 ItalyWaste & Scrap$321M
South Carolina🇩🇪 GermanyTransportation equip.$3,774M
South Dakota🇨🇦 CanadaProcessed Foods$297M
Tennessee🇨🇦 CanadaTransportation equip.$2,017M
Texas🇲🇽 MexicoPetroleum & Coal $33,627M
Utah🇬🇧 UKMetal $6,805M
Vermont🇹🇼 TaiwanComputer & Electronics$447M
Virginia🇮🇳 IndiaMinerals$1,799M
Washington🇨🇳 ChinaAgricultural $10,553M
West Virginia🇮🇳 IndiaMinerals$657M
Wisconsin🇨🇦 CanadaMachinery$1,802M
Wyoming🇮🇩 IndonesiaChemicals$200M

When it comes to the types of exports, transportation equipment emerges as the primary source for the majority of states, with minerals and ores, chemicals, and computer and electronics following closely behind.

For instance, North Carolina ships $4.3 billion worth of chemicals to China, marking one of the longest-distance trade flows among states. Meanwhile, Florida boasts one of the most diverse export portfolios, engaging in trade with Europe, South America, and the Caribbean.

Louisiana heavily relies on the export of agricultural products to China, which contributes significantly to its total GDP. Similarly, Michigan’s transportation equipment exports to Canada constitute a noteworthy portion of the state’s GDP.

In Oregon, exports of semiconductors and other computer parts to China, driven by companies like Intel and Micron, play a crucial role in the state’s economy. Meanwhile, Utah predominantly exports primary metal manufacturing goods to the United Kingdom.

The biggest exporter in the country, Texas, sees a significant portion of its GDP attributed to exports to Mexico, further underlining the state’s economic ties with its southern neighbor.

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