There are signs the world is losing faith in the dollar

24 April 2025, 22:39 | Updated: 25 April 2025, 06:44

First he took the US on a collision course with China. Then he came for the rest of the world.

He crashed into the financial markets and now Donald Trump has been gently tapping on the brakes all week.

The world's economic policymakers have been on quite the journey over the past few months.

Many of them will have felt a little queasy as they got off the plane in Washington DC for the International Monetary Fund's (IMF) annual spring meetings.

This was their opportunity to talk. To strategise, strengthen alliances and figure out their next move.

Rachel Reeves was in the mix. While all the focus has been on a US-UK trade deal - and she is due to meet her US counterpart on Friday - the chancellor was also here to meet her G7 and G20 allies.

Countries across the world are eager for Mr Trump to reduce his tariffs but they are also looking to each other, reflecting on how the world might look in the future and whether the US is a reliable long-term partner.

That much was obvious from a conversation with Paschal Donohoe, Ireland's finance minister and president of the Eurogroup.

He told Sky News that Ireland, a highly US-orientated economy, was diversifying.

That being said, he was "more optimistic than some" that a high level of trade integration would prevail well into the future.

"What I think is very possible is the structure of that globalisation could begin to change," he said.

That changing structure might include a rejection of China's decades-long model of export-led growth.

Since joining the World Trade Organisation in 2001, China has been pumping out cheap goods into the world economy, making far more than it consumes at home.

Poor countries across the world have taken a similar approach to development but the US Treasury secretary said on the sidelines of the IMF on Wednesday that it was "absurd" for multilateral institutions to continue treating China like a developing economy.

He called for a "rebalancing".

Read more from Sky News:
Student killed and three injured in stabbing at French school
Who will be at the Pope's funeral - and who won't be

There is a recognition among world leaders that some of Mr Trump's grievances are reasonable.

They believe his approach is the wrong one but in interviews they are now talking about the negative consequences of trade imbalances and globalisation - the impact on communities and the undercutting of wages.

That wasn't the case just a few months ago.