Why Donald Trump’s about-turn on the US dollar is right on the money
- After months of bemoaning the strength of the greenback, the US president has good reason for now declaring his support for a strong dollar – he’s trying to shore up confidence in US paper as the Treasury goes on a borrowing spree
In pre-pandemic 2019, the White House identified the best interests of the US – and by extension Trump’s re-election prospects – with US exporters doing well. Their success would result in the creation of yet more employment for an economy that was already seeing substantial and sustained job creation.
As US president, “one would think that I would be thrilled with our very strong dollar. I am not!” Trump tweeted on August 8 last year, criticising tighter Federal Reserve monetary policy and complaining that US dollar strength was “making it more difficult for our great manufacturers like Caterpillar, Boeing, John Deere, our car companies, and others, to compete”.
That was pre-Covid-19, a world before economic lockdowns, where consumers were spending and businesses investing. In that world, a more competitive currency could have helped US exporters gain some degree of competitive advantage in pursuing trade opportunities.
