President Donald Trump on Tuesday said he has no problem with the sharp decline in the dollar that’s been triggered by convulsions in global bond markets and growing skepticism about the U.S.’s reliability as a trading partner.
“I think it’s great,” Trump told reporters in Iowa when asked about the currency’s decline. “Look at the business we’re doing. The dollar’s doing great.”
Trump has long maintained that a weaker currency helps industries that he’s seeking to boost — particularly manufacturers, but also oil and gas. And U.S. corporations that export goods and services abroad typically report stronger earnings when they can convert foreign payments into a weaker greenback.
It’s generally true that if your currency is weaker against a country with a stronger currency, the other country has an incentive to buy things from you - because you can sell them cheaper than they can make them themselves. This is why the US buys so many manufactured goods from SE Asia.
But it means you have to already have a manufacturing infrastructure, which the US has much less of today than in, say, the 1950s. Also, it helps if your government isn’t pissing off the entire world.