Three Dimensions of the U.S. Monetary-Security Nexus: Weaponized Dollar, Leveraged Military Strength and Economic Securitization

Abstract

This study examines the operational dynamics of the U.S. monetary–security nexus, exploring how Washington intertwines monetary dominance and military power in recent foreign policy. The U.S. has increasingly weaponized its dollar hegemony to advance geopolitical objectives by imposing targeted financial sanctions on recalcitrant states. It has not only weaponized monetary dominance for security purposes but also leveraged its military strength to achieve monetary objectives. The Trump administration exemplifies this dynamic by seeking to reshape the international monetary system, specifically employing security guarantees as coercive negotiating leverage. Furthermore, the administration has systematically attempted to securitize economic affairs to legitimize its aggressive economic policies as essential components of national security preservation. While the weaponization of the dollar has heightened the security vulnerability of states dependent on the U.S. currency, the leveraging of security guarantees, coupled with economic securitization, has amplified the economic vulnerability of states reliant on U.S. security commitments. For close U.S. allies, the security vulnerability associated with dollar dependence remains relatively circumscribed, given their low risk of being targeted by U.S. financial sanctions. However, their structural reliance on U.S. security architectures renders them acutely vulnerable to U.S. demands for greater defense burden-sharing. Accordingly, this study concludes that South Korea must develop a comprehensive economic security strategy designed to mitigate the economic vulnerabilities stemming from its dependence on U.S. security guarantees.