Even President Donald Trump got scared last week that as the bond market panicked in reaction to his trade war, the “almighty dollar” — and the global financial system it supports — might be at risk. For all Trump’s cheery talk, this danger of “de-dollarization” continues.

Investors this week were selling anything American — stocks, bonds and currency — as the meltdown spread. Analysts say the sell-off reflected a fear that the U.S. economy itself was a risky bet. Trump’s advisers pretended everything was fine, but Trump told the truth Wednesday afternoon after he paused the tariffs he had just installed against most countries. “The bond market is very tricky, I was watching it,” Trump told reporters. “I saw last night where people were getting a little queasy.” In another chat with reporters, he explained that investors “were getting a little bit yippy, a little bit afraid.” Trump certainly understands fear and greed, the twin poles of market psychology.

Fear returned as the dominant sentiment Thursday, as markets cratered again on recognition that Trump is still escalating his trade war with China, the world’s other economic superpower. Market anxiety might not ease until Trump signals that he’s ready to negotiate a deal with China, too.

For Lawrence H. Summers, a treasury secretary under President Bill Clinton, Trump’s action was a recognition that he was nearing a tipping point like the Suez Canal crisis in 1956, when Britain forever lost the primacy of the pound as a reserve currency. “I suspect the administration stepped back because it saw a Suez moment approaching with general lack of confidence in U.S. financial assets spreading to the dollar,” Summers messaged me Wednesday. Markets rise and fall, and the long-term position of the U.S. economy remains dominant. But there’s a deeper trend at work here that gets too little attention amid Trump’s daily policy announcements and reversals. De-dollarization is already happening in a world that is fed up with arbitrary American policy and mismanagement of domestic and global economics. A report last year by the Brookings Institution cited three main challenges to the dollar’s primacy. First, the United States for more than a decade has overused economic sanctions, making dollar transactions more cumbersome; second, U.S. debt and deficit problems keep getting worse, ignored by both major political parties and weakening the country’s long-term creditworthiness; and third, financial technology is creating quick new ways to settle transactions outside the dollar market. Past “weaponization” of the dollar might have backfired. Jack Lew, a treasury secretary under President Barack Obama, warned me in a 2016 interview about America’s “sanctions overreach” against Iran, Russia, Cuba, China and a host of other countries. The more sanctions have been used, the less effective they have become, Lew noted — and that was nine years ago. With the world increasingly wary of dollars, China has been pushing its own digital currency for cross-border payments. China collaborated with the United Arab Emirates and Saudi Arabia on a project known as mBridge, to create a “digital yuan” as an alternative to dollar finance. According to a recent report by the Asia Society titled “Petrodollar to Digital Yuan,” this movement is accelerating.

China’s challenge to the dollar could become more aggressive if the trade war escalates. The Bank of China has reportedly established a digital yuan payment mechanism with 10 Southeast Asian and six Middle Eastern countries, in theory allowing them to bypass the U.S.-led SWIFT system. Summers and other experts cautioned me, however, that big global financial players are unlikely to entrust transactions to a digital-currency system run by a police state. Here’s the bottom line: The dollar’s role as the world’s payment mechanism and reserve currency is a proxy for global confidence in America. The United States, through Republican and Democratic administrations, has protected the rule of law and international financial stability. But in his first 100 days, Trump has challenged those very principles.

“We have created a common antagonist for the international system: the United States,” argues Michael Froman, the president of the Council on Foreign Relations. If that continues, it’s hard to imagine that the dollar won’t eventually lose its dominant role in global commerce.

David Ignatius is a Washington Post columnist.