Trump advisers are plotting to deliberately devalue the dollar if he’s re-elected, report says
Top advisers said to be ‘actively debating’ move in order to bolster US exports
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Your support makes all the difference.A second Donald Trump administration could unilaterally devalue the US dollar, the de facto reserve currency used across much of the world as a lynchpin in the global financial system.
According to Politico, Mr Trump’s crop of economic advisers is “actively debating” how to devalue the dollar to bolster American exports, even at at the expense of the dollar’s status as a reserve currency and despite the risk that a devalued dollar could pour gasoline on inflationary fires that President Joe Biden has been trying to quell during his term in the White House.
The top booster of devaluation is reportedly Robert Lighthizer, Mr Trump’s former international trade representative, along with other Trumpworld advisers in Mr Lighthizer’s orbit.
One source told Politico that “currency revaluation” would “likely be a priority” for some of Mr Trump’s top aides if he and they are returned to the White House after this year’s presidential election.
As president, Mr Trump often fixated on America’s trade deficits with other countries and claimed that such deficits were evidence that those countries were somehow “taking advantage” of the US.
A former Trump administration official said devaluing America’s currency is attractive to Mr Trump and his advisers because it could, in theory, provide an artificial boost to American exports.
But at the same time, that boost to exports could come at the expense of the domestic economy by sending inflation rising while potentially having global effects by inviting retaliatory devaluations by aggrieved US trade partners.
Such a move would likely be strongly opposed by most American financial institutions because of the inflationary effect it could have.
Devaluation could also be a relief to many of the authoritarian leaders and regimes Mr Trump professes to admire, as it would threaten the dollar’s reserve currency status and make it much harder for the US to use economic sanctions on countries such as Iran, Russia and China.
Another former Trump administration official said it was long a pet idea of Mr Lighthizer’s, as well as one supported by Peter Navarro, the former Trump trade adviser who is currently serving a prison sentence for contempt of congress.
“Lighthizer brought that up all the time because he felt like tariffs weren’t enough to achieve the objective” of rebalancing trade with the rest of the world,” said the official, who added that then-Treasury Secretary Steven Mnuchin refused to consider it.
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