This assertion is absurd. The US trade deficit increase has nothing to do with world's love or hate to the US dollar. Contrary to your statement, de-dollarization has gained traction in recent years. Many trades in the world are now conducted in the currencies other than the dollar, and they are never reported to a third party.
Another absurd assertion. China's dollar-dominated assets holding is actually decreasing in comparison with China's total foreign assets holding increase. Just remember Chins is in fact the largest economy in the world in real economic output, and it is in the process to accumulate national wealth at an unbelievably high speed. The total amount of China's foreign assets holding is HUGE. Do you know, for instance, China is a significant share-holder of Saudi's largest state-owned oil producer Aramco?
Every trade needs a widely available money.
If I have the money in my pocket to shop then the opposite side of the ledger ( central bank) can count that money as pure profit (minus cost of issuing), and I pay that price for the opportunity to use that coinage for my transactions.
The monetary authority usually part/in close relationship with the government, and the later control the amount of money AND the value of money in circulation with taxation.
Now, the trade BETWEEN governments is a different animal.
Before the USA $ de-goldisation the trade was tightly controlled and small, but Nixon created an opportunity for the FED and for the Capitol to work as a de-facto central monetary authority of the world, and at the same time as the in a limited capability as the central government of the world.
So , it is ending now.
The increasing world trade makes a need for the USA dollar, that makes it possible to run a trade deficit, and to be the centre of the world financial/trade transactions.
but there is no real backing of the USA dollar apart from its military, as soon as the increase of need stop, the dollar will start to loose its value, and that will tank the dollar AND the world trade.
So, the increase strength of China will make the USA military irrelevant ,ant that in turn will kill the global trade.
Back to the 60s.