The world economy is becoming wary of America

September 23, 2026 — 7:37pm

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Global investors are balking at US bonds. Talk of the US dollar’s dwindling power is getting louder. Foreign governments are hauling their gold out of American vaults.

Almost two years into President Donald Trump’s second term, the world economy is increasingly looking for ways to distance itself from the United States. Concerns about a $US40 trillion ($56 trillion) debt burden, the excessive use of sanctions to solve foreign policy problems and Trump’s penchant for pushing the limits of the rule of law are raising questions about the appeal of the world’s largest economy as a haven for global investment.

Despite pledges by foreign companies and nations to invest in the United States — in many cases to curry favour with the White House — capital is starting to seek alternative destinations.

“Geopolitical factors and US weaponisation of the dollar through financial sanctions are causing central banks and other official investors to attempt to diversify away from dollar assets,” said Eswar Prasad, the former head of the International Monetary Fund’s China division.

The United States is not yet an investment pariah. Private investors are still pouring money into American financial markets and stocks, artificial intelligence infrastructure is booming and no rival currency is poised to topple the US dollar imminently.

In testimony before Congress last week, Treasury Secretary Scott Bessent said he remained confident in the credibility of the country’s financial system, arguing that bond auctions continue to operate successfully and that the dollar is still thriving as measured by its share of global transactions.

‘It’s like the countries don’t trust the US. I do think that there is a fear factor.’Daniel Tannebaum, former Treasury Department and Federal Reserve Bank of New York official

“The US is, in fact, the leader, and the leader does not fear competition,” Bessent said. “Competition makes us better.”

But cracks in America’s economic dominance are starting to show.

The most glaring example is the bond market. Yields have been soaring as investors, nervous about the mounting national debt demand a higher rate of return for buying........

© Brisbane Times