Sen. Marco Rubio (R-FL), the vice chairman of the Senate Intelligence Committee, has warned that China was looking to make the yuan the world’s most traded currency, replacing the U.S. dollar. So far, China has managed to evade U.S. sanctions on Russia through a complex trade system independent of Western banks.
Rubio in a recent op-ed for The Telegraph, a British outlet, warned that the United States’ ability to punish other countries through economic sanctions was going to be severely limited by China’s yuan which is currently the most traded currency in Russia. In the op-ed, he proceeds to state that this alternative financial system is outside of what they had previously considered and it provides a “lifeline” to Russian President Vladimir Putin allowing him to continue his invasion of Ukraine.
He further warned that this alternative system “creates a blind spot” where nations and companies who are doing business with the United States “can hide questionable behavior from the global community.” As the Chinese economy continues to grow it is also likely that more countries are going to start being in Beijing’s line of influence and use their alternative financial systems.
He proceeded to argue that there are two policies that can help following these recent developments. The first one would focus on revitalizing domestic manufacturing in every sector from semiconductors to pharmaceuticals. The second is that the United States needed to become better at making and maintaining its relations with its allies as it could no longer rely on foreign countries following its lead “by default.”