Finance: Trump Adopts a Curious Position Regarding the Dollar

Recent incendiary comments by Donald Trump about the “too high” value of the dollar have brought back to the spotlight the specter of a potential devaluation of the American currency. By denouncing the current strength of the greenback, the former president seems to want to reignite the fuse of an explosive financial debate. 

Finance Under Pressure: Trump Criticizes the “Overvaluation” of the Dollar

In a virulent diatribe published on Truth Social this Tuesday, Donald Trump sharply criticized the appreciation of the dollar against the Japanese yen, reaching a 34-year-high. According to him, this monetary vigor constitutes “a disaster for our manufacturers” who will be “forced to build factories abroad” due to an inability to remain competitive. An outright attack on finance that seems to echo information revealed by Politico, which suggests that Trump is seriously considering a devaluation of the greenback if he were to return to power.

The timing of these remarks is not coincidental, as they come in the midst of the heavily publicized trial of the former head of state. By attacking monetary policy, Trump appears to want to rally his populist electoral base around a familiar protectionist economic discourse. Especially since his repeated criticisms of the Biden administration, which he accuses of having “weakened” previous trade efforts against China and Japan, seem to reflect his resolutely unilateralist vision of international relations.

Rekindling the Flames of an Explosive Economic Debate

Beyond political rhetoric, Donald Trump’s explosive statements have reactivated an old financial debate with potentially devastating implications. Indeed, any deliberate attempt to weaken the dollar would inevitably bring back the specter of an uncontrollable inflationary spiral. This scenario is all the more concerning since consumer prices remain high despite the aggressive monetary tightening efforts initiated by the Federal Reserve.

Although the real reasons for the current appreciation of the greenback are more closely related to the strength of the American economy, experts remain extremely skeptical about the possible destabilizing maneuvers of a President Trump. Previous protectionist precedents, especially the devastating trade war with China, are still fresh in the memory.

Ultimately, Donald Trump’s thunderous outings on the dollar will undoubtedly revive fears of a serious protectionist tilt if he were to return to power. His bellicose statements indeed seem to reflect a unilateralist vision of trade relations, where currency devaluation could serve as an economic weapon to the detriment of global financial stability.