"Corruption Is More Dangerous Than Tariffs"... U.S. Scholars Warn of 'Threats to Dollar Dominance' in Trump’s Second Term [AEA 2026]

2026 American Economic Association Annual Meeting (ASSA)
Wave of Criticism Ahead of One Year of Trump’s Second Term
Rogoff: "Corruption Won’t End With Trump"
Concerns Over Weakened Dollar Dominance

"What economists got most wrong about Trump was not tariffs, but underestimating the importance of corruption," said Kenneth Rogoff, Professor of Economics at Harvard University.

On January 3 (local time), at the opening of the 2026 American Economic Association (AEA) Annual Meeting in Philadelphia, Pennsylvania, USA, a series of critical evaluations were presented regarding the second Donald Trump administration, which will mark its first anniversary later this month. Beyond tariff policies, voices warned of the structural risks posed to the U.S. economy and the dollar's dominance by the collapse of institutions and the rule of law, power-driven corruption, and the rise of authoritarianism.

Rogoff: "Trump's Corruption Is a Bigger Problem Than Tariffs"... Uncertainty in Trade Policy Also Pressures Dollar Weakness

Kenneth Rogoff, Professor of Economics at Harvard University, spoke on the 3rd (local time) at the 'American Economic Association Annual Meeting (ASSA) 2026' held in Philadelphia, Pennsylvania, USA.

Kenneth Rogoff, a globally renowned scholar in finance and monetary economics, identified "corruption" as a more serious issue than tariffs in the second Trump administration. He cited as an example that President Trump's family and key administration officials are amassing enormous wealth through virtual currencies, stating, "President Trump still has three years left in his term. This is not merely a problem that ends with Trump, but one that has changed the standards themselves, making it potentially much more serious than tariffs." He argued that this goes beyond a simple corruption controversy and erodes trust in American institutions and the rule of law. To illustrate this, Professor Rogoff referenced the case of President Ulysses Grant during the 1870s "Whiskey Ring Scandal," a representative example of power-driven corruption involving the president's personal secretary.

He offered a generally critical assessment of the overall economic policy of the second Trump administration, suggesting it could serve as a factor weakening the dollar. In the "Post-Tariff War Dollar" session, Professor Rogoff pointed out, "In the long term, tariffs are negative for the dollar's role in trade," emphasizing that tariff policies could undermine the dollar's international status beyond short-term exchange rate effects. He further analyzed that the undermining of the independence of the Federal Reserve and the weakening of trust in institutions and the rule of law are also risk factors shaking the dollar's dominance. Speaking with Korean journalists that day, he warned, "It has been less than a year since President Trump's term began, but the policy confusion is astonishing," adding, "The dollar could face a critical problem within four to five years." However, he also noted that certain policies-such as easing AI regulations, promoting technological innovation, strengthening hard power centered on military and security, and strategies to develop the U.S. as a hub for virtual currencies and stablecoins-could be favorable for the dollar.

Additionally, many pointed out that the uncertainty surrounding tariff policy itself is a direct cause of the recent weakness of the dollar. Professor Sebnem Kalemli-Ozcan of Brown University said, "The uncertainty about how tariff policy will change has led to a decline in the dollar's value," while Professor Linda Tesar of the University of Michigan criticized, "The effect of uncertainty was so great that it outweighed the appreciation pressure on the dollar caused by tariff imposition."

Non-Mainstream Scholars: "The End of the U.S.-Led Liberal Order"... Concerns Over Declining Trust in the Dollar

At the conference, strong criticism also came from non-mainstream scholars who went beyond the perspectives of mainstream economics. In the session "Trump's Economic Policies and Their Impact: A Critical Assessment," co-hosted by the Association for Evolutionary Economics (AFEE), the Association for Social Economics (ASE), and the Union for Radical Political Economics (URPE), it was pointed out that the economic direction of the second Trump administration represents "prosperity for the few, austerity for the many," and the economic and political implications of this were intensively discussed.

James Galbraith, professor at the University of Texas at Austin, is speaking at a panel discussion at the Annual Meeting of the American Economic Association (ASSA) 2026 held on the 3rd (local time) in Philadelphia, Pennsylvania, USA.

James Galbraith, professor at the University of Texas at Austin, diagnosed that the United States now faces irreversible geopolitical realities, such as the rise of China, the recovery of Russia, and the regionalization of energy and information orders. He stated, "The liberal world order led by the United States is already over," and added, "Trumponomics lacks a coherent theoretical framework like Reaganomics." He further criticized, "Rather than a national strategy, it is closer to a collection of policies reflecting the corporate interests of specific oligarchic groups."

Darrick Hamilton, professor at The New School for Social Research in New York, bluntly criticized President Trump as a "grifter in chief" who uses policy to enrich his inner circle and destroy the civil service organization.

Gary Dymski, professor at the University of Leeds in the UK, characterized President Trump's policies as a "triple decoupling" that amplifies conflict. He warned that simultaneous separation is underway in production and trade, dollar financial order, and social and racial spheres, which could undermine the dollar's privilege as a key currency and sow the seeds of a financial crisis.