Dimon: Dollar will stay dominant if U.S. secures trade deals

Jamie Dimon, chief executive of JPMorgan Chase, told business and policy audiences this week that the U.S. dollar will remain the dominant global currency only if the United States secures trade agreements that lock in economic ties and keep transactions priced in dollars. He linked formal trade pacts to continued demand for the currency.

Dimon explained that when firms and governments sign contracts denominated in a single currency, banks and exporters settle invoices, manage foreign-exchange risk and hold liquid buffers mainly in that currency. “Durable trade arrangements create predictable flows of goods, services and capital that reinforce the dollar’s role in global finance,” he said.

He described the mechanics that support a reserve currency: consistent invoicing in dollars leads companies and central banks to hold dollar reserves and use dollar funding. Without broad, stable trading relationships, counterparties may shift invoicing and reserves toward other currencies over time, reducing the dollar’s share in international payments.

Dimon placed his remarks in the context of geopolitical shifts. Some governments are pursuing policies to reduce reliance on the dollar, regional trade increasingly uses local currencies in some areas, and new payment technologies and central bank digital currencies offer alternatives for cross-border transactions.

Market participants and analysts noted a link between trade policy and dollar liquidity. They said expanded trade agreements would likely encourage banks and multinational firms to maintain dollar-centered operations, supporting funding markets. A prolonged period without new trade deals could speed changes in invoicing practices and reserve allocations, with effects on currency markets and U.S. borrowing costs.

Dimon also addressed the role of regulators and fiscal policy, saying commercial agreements must be backed by predictable legal and financial frameworks so dollar-denominated contracts remain enforceable. That predictability, he said, helps foreign central banks and corporations feel comfortable holding U.S. Treasuries and dollar cash balances.

The dollar still accounts for a large portion of global foreign-exchange reserves and remains the primary currency for international trade settlement. Dimon did not name specific trade agreements to pursue, and his remarks focused on the relationship between trade policy and the dollar’s international position.