Elina Ribakova and Anne-Marie Slaughter say Trump is so ignorant that he does not realise that his big guns – sanctions and tariffs – as a foreign policy tool, are going to backfire. His hit-them-where-it-hurts approach may lead to short-term effects, allowing him to claim instant victory over Iran. But preventing other countries from trading with Iran in US dollar is counter-productive, and could cause long-term damage to the currency’s dominance in global transactions.

The “maximum pressure” the Trump administration puts on Iran, hoping to bend the regime to its will, is an abuse of power. The authors say Trump’s arbitrary use of the US currency as weapon of choice undermines “one of America's primary sources of global power and influence .” As the US can no longer be trusted “to oversee global financial flows, new networks are emerging to offer countries alternatives to the dollar.”

China and Russia both see the dollar hegemony as a thorn in their side. As a result of Western sanctions following its annexation of Crimea in 2014, Russia has forged closer ties with China. The two countries have in recent year agreed on a new cross-border payments system for settling bilateral trade in renminbi and rubles.

According to the authors, Russia has launched a card payments system – its SWIFT alternative – to circumvent US-based credit card networks. In China, mobile payment apps such as Alibaba’s Alipay and Tencent’s WeChat Pay allow consumers to use their smartphones to pay directly, foregoing credit cards.

Iran and Turkey have since expressed an interest in joining forces with China and Russia. US allies, like India and Japan – big buyers of Iranian oil – as well as European countries, are uniting to defy the US, since Trump’s unilateral withdrawal from the 2015 nuclear deal (JCPOA) with Iran. In order to salvage the deal, Britain, France and Germany, three of the signatories, have helped set up a new payment mechanism, INSTEX, that aims to facilitate their companies to trade with Iran – albeit in limited scope – while avoiding US sanctions.

The US must realise that if so many major economies, including key European ones, are determined to subvert the dollar, their efforts may eventually have an impact on its global dominance. The dollar emerged as the uncontested leader among international currencies only in the aftermath of the Second World War, overtaking the British pound. There is no iron law that the dollar hegemony is eternal.

Trump’s myopic Iran-policy poses not only a threat to global peace and stability, it also risks to dismantle the structure of the international payment system, on which the US dollar relies to project its economic dominance. Once lost, it would take years for the US to regain the status. Obviously Trump himself never thinks about the dear price the country has to pay for his reckless actions.