#trump + #economics

The U.S. Dollar Index, which measures the greenback against other major currencies, logged its steepest six-month drop in more than 50 years in the first half of 2025. Though the decline hasn’t deepened, the dollar index is still about 10% lower than the start of Trump’s term.

A strong dollar makes imports cheaper and can help keep inflation in check. A weak one can increase prices on foreign goods but boost American exports.

Trump has suggested a strong dollar puts the U.S. at a disadvantage and that a weak dollar helps American industry. And as with most things with Trump, he’s been blunter in his messaging.

“You make a hell of a lot more money with a weaker dollar,” he said last year, one of a number of public statements showing his preference for seeing the dollar decline.

Trump isn’t alone in seeing benefits of a weaker buck.

In recent months, corporate earnings calls have been peppered with talk of how a weaker dollar has helped companies from Philip Morris to Coca-Cola, with executives pulling out C-suite phrases like “favorable currency impact” to note how the dip brought tailwinds outside the U.S. that added to bottom lines.

Currency values are constantly moving and, while the dollar’s recent fall is notable, it has reached lower levels at points in the presidencies of each of Trump’s predecessors, back through the creation of the Dollar Index in 1973, when Richard Nixon was at the helm.

Kenneth Rogoff, a Harvard University economist and former chief economist at the International Monetary Fund, says while “a lot of policies that Trump is doing are something of a cancer for the dollar,” he believes that it was destined to fall no matter who was in charge.

“The dollar had been on a 15-year bull run,” he said. “I would argue the dollar is still wildly overvalued, and over the next maybe five or six years, it might fall 15%.”

What does that mean for American consumers? Rogoff says commodity prices are likely to rise, particularly with the impact of the Iran war on fuel prices.

“They’re just going to go up,” he says, “no matter what the dollar’s at.”

Ford said the US car maker's tariff costs were $900m (£660m) higher than expected last year because of a last minute change to the Trump administration's tariff relief program.

Chief executive Jim Farley said Ford spent double what it had expected on tariffs in 2025 - roughly $2bn - due to "the unexpected and late year change in tariff credits for auto parts".

Separately, Ford had previously disclosed a $19.5bn hit as a result of its shift away from electric vehicle plans. Those charges also contributed to its fourth-quarter net loss of $11.1bn. The vehicle manufacturer had said it was backing away from plans to make large EVs, citing lacklustre demand and recent regulatory changes under Trump. The business case for leaning heavily into EV production, specifically large-sized EV models, has "eroded", the company had said.

In research released Thursday by the Federal Reserve Bank of New York, a group of analysts and economists found that in 2025, the average tariff rate on imported goods rose to 13% from just 2.6% at the start of the year. The New York Fed found that 90% of the cost of increased tariffs, which Trump imposed on goods from Mexico, China, Canada and the European Union, was paid for by companies and often passed on to shoppers. "US firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025."

The reaction from exporters in 2025 was essentially the same in 2018, when Trump imposed certain tariffs during his first term in office – the cost of goods for consumers rose, with little other economic impact recorded, the New York Fed said at the time.

The Kiel Institute for the World Economy, an independent research firm in Germany, said in a report last month that it had found "near-complete pass-through of tariffs to US import prices." Kiel researchers analysed 25 million transactions and found that in exporting countries like Brazil and India, the price of goods from those countries did not decline. "Trade volumes collapsed instead," the Kiel report said, meaning exporters preferred to cut the amount of goods being shipped into the US rather than lower prices.

The National Bureau of Economic Research also found that the pass-through of tariffs was "almost 100%", meaning the US is paying for the increase in prices, not exporting countries.

Similarly, the Tax Foundation, a Washington DC-based think tank focused on US tax policy, found that increased tariffs on goods in 2025 increased costs for every American household. Defining tariffs as a new tax on consumers, the Tax Foundation said the 2025 increases cost the average household $1,000 (£734.30). In 2026, tariffs will cost the same household $1,300. The Tax Foundation said even the "effective" tariff rate, an average rate that takes into account people buying fewer goods in response to increased prices, is now 9.9%, making it the "the highest average rate since 1946". With such impacts on people, the Tax Foundation said any economic benefits of tax cuts included in Trump's "Big Beautiful Bill" will be offset entirely.

Even without adding in Trump’s own $5.5 billion net worth, Forbes estimates that his top advisors are worth $7.5 billion, more than doubling the $3.2 billion combined worth of Trump’s 2019 Cabinet. (By contrast, Biden’s Cabinet of regular Joes was barely worth $110 million combined in 2021.)

In just the past week, President Donald Trump has ordered defense companies to halt dividends and stock buybacks, and limited executive compensation to $5 million a year; ordered Fannie Mae and Freddie Mac to buy $200 billion of mortgage-backed securities; ordered an array of energy firms to invest in Venezuelan oil infrastructure, called for a 10 percent cap on credit card interest rates; announced steps to ban institutional purchases of single-family homes; and opened a criminal investigation into Jerome Powell's handling of Federal Reserve building renovations in an attempt to influence monetary policy.

Trump said at the roundtable, adding "this money would not be possible without tariffs."

Another way to spend the money that’s already been spent many times over.