Most economists say that a weak dollar is a symptom of poor economic policies, however funny enough same people say thesame thing about an overvalued dollar.
So where do we go from here?
Welcome to the ongoing trade war, occasioned by Mr Trump's insistence on drastically increasing tariffs on imports.
This indeed smells like a move to weaken the dollar.
Some brilliant chap said, there is no situation where crashing your own currency is rational because, it will cause too much suffering for the general public pending when things normalise.
Now is there an advantage in crashing the dollar? I would say it depends, it's not a definite "no" answer.
Now, basic market economics tells me that the reason or at least a major reason the American industry loses a lot of jobs is because of their strong currency– meaning you make more profit from imports than exports. So ofcourse, the meaning of this is that indigenous industries suffer and shrink.
This is not a new phenomenon, it has happened in Nigeria, Egypt and from my findings, about any area that has had a very strong currency. Well I'm a Nigerian so I can tell you first-hand. It was in the 70's, the "oil-boom" it was called because of huge crude-oil reserves in the country. This was s time where the naira(the currency) was so strong– stronger than the dollar – and as such, importation began to sour higher and higher and it is like a plague today, afflicting our economy.
So to my mind, I thimk what Mr. Trump is trying to do is that he wants to crash the dollar, but without compromising the dollar's place as the World's Reserve Currency. A lot of people doubt this balance is attainable.
If my thoughts a true, meaning he is using tariffs as a negotiating tool to get other countries to peg their currencies to a weakened dollar, whilst the US maintains their place as stated above. This will therefore trigger more the export industry, high demands for exports will thus lead to the opening of more companies in the US and ofcourse more jobs available for it's people.
Now the likely bottle-neck with this is that, this would mean that other countries will essentially become vassal states to the US. By pegging their currencies to the US weakened currency, it would be like giving away their economic sovereignty to the US.
Furthermore, those countries would have to spend a lot of money trying to ensure their currencies are pegged enough to the US dollar( countries like Egypt have testimonies on this expensive venture). And it would require a lot of confidence and trust in the US government.
Many say Trump is terrible in building trust, citing example like him threatening Canada or him wanting to take Greenland and so on.
Well I think there's often something he sees that others don't and he goes about it in a way that looks rather awkward. That has been his style. I think he would eventually gain trust.
https://youtube.com/shorts/pe_nFv-7C1c?si=L3JbkzRQNDCeYNFL
[source[(http://www.youtube.com/@TrishReganChannel)