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0 pointsmgh955mo ago0 comments

In October of last year, people were betting on Trumps election leading to tariffs leading to a stronger dollar. This trend continued post-election pre-inaguration. Since the tariffs did not materialize to the level expected, the dollar weakened to its levels prior to his election.

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epistasis5mo ago

Your explanation makes no sense. First, nobody thought that Trump would actually go through with the tariffs because it's an insane plan and that wiser people in the administration would restrain Trump. So the dollar started to devalue when people realized that "holy shit these tariffs might actually happen." The tariffs are way way bigger than anybody expected.

The entire goal of the tariffs were to weaken the dollar:

> The Mar-a-Lago Accord is a proposed economic and trade initiative of the Donald Trump administration during his second term. Named after Trump's Mar-a-Lago estate in Florida, the Accord is a blueprint for restructuring global trade and monetary relations. Its core goal is to devalue the dollar while preserving its role as the world reserve currency, a careful balancing act intended to avoid the contradictions described in the Triffin paradox.

https://en.wikipedia.org/wiki/Mar-a-Lago_Accord

mgh95OP5mo ago

No, ordinarily tariffs result in currency appreciation (see https://www.wto.org/english/blogs_e/ce_ralph_ossa_e/blog_ro_... for an accessible discussion).

But yes: weaking the dollar was the goal, but the US did not achieve that to the degree of something like the Plaza accords.

watwut5mo ago

> would actually go through with the tariffs because it's an insane plan and that wiser people in the administration would restrain Trump.

What is insane is to assume republicans picked by Trump will restrain Trump. The adults in the room theory was disproven long before that election.

Trump 1.0 had tarriffs. Trump talked abput tarrifs. People in fact assumed Trump will do tarriffs, they just slightly underestimated how bad the trade war will be.

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