Trump seeks to weaken the dollar to reduce trade deficit

Former President Donald Trump believes that the strong US dollar is hurting American manufacturing and contributing to the trade deficit. He argues that a weaker dollar would boost exports and create jobs in the US. Experts have different views. A strong dollar makes foreign goods cheaper, which leads to more imports and fewer exports. David Lubin from Chatham House noted that the dollar's value is influenced by a global market, and it isn't something a US president can easily control. Investment strategist Anthony Abrahamian pointed out that the dollar's strength over the past years is tied to strong US economic growth compared to other countries. He mentioned that high consumer spending in the US results in higher imports. The US government does have some tools to influence the dollar's value. The Federal Reserve can cut interest rates, and the Treasury could buy foreign currencies to lower the dollar's value. However, this would require large amounts of money in the vast currency market. Another proposed solution is similar to the Plaza Accord from 1985, which involved cooperation among major economies to weaken the dollar. A new idea called the "Mar-a-Lago Accord" suggests a more aggressive approach but may face reluctance from other nations, especially China. A weaker dollar could lead to higher prices for goods and may not necessarily make US exports more competitive. The situation remains uncertain, and it is unclear if Trump will actively try to devalue the dollar. Experts advise caution in interpreting his statements.