Trump’s Dollar

Surging dollar complicates Trump job-creation plans illustrates why running an economy is hard.

  1. A strong dollar makes it more difficult for US companies to export. Our products become more expensive, so foreign consumers buy less and US manufacturing suffers and lays off workers.
  2. A strong dollar makes foreign products cheaper, so US consumers buy less US made products.

What the article leaves off is that Trump threatens 35% tariffs on US companies using foreign labor because it would be cheaper (and even more so with a stronger dollar). This will make US made products more competitive. But only because products are more expensive. Inflation will rise even as workers are not making more money. Which will be essentially stagflation.

 

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