Does Trump really want a weaker dollar?

Subscribe to enjoy similar stories. “A strong dollar is in our national interest." The simple message from Robert Rubin, who became treasury secretary in 1994, marked a turning point. For decades, American policymakers had complained about how the weak currencies of their country’s trading partners had made life difficult for domestic manufacturers.

Since then, they have either repeated Mr Rubin’s maxim, or avoided discussing the appropriate level for the greenback altogether. Now things are up in the air. With trade policy increasingly protectionist and the dollar suddenly weakening, three decades of Treasury orthodoxy is in question.

The Trump administration is not speaking with one voice. Scott Bessent, the new treasury secretary, has stressed that the strong-dollar policy is still in place. But both President Donald Trump and J.D.

Vance, his vice-president, have argued for a weaker currency, saying that the greenback’s strength is a problem for American industry. Messrs Trump and Vance may, therefore, welcome the fact that their new, ultra-aggressive trade policies are ripping through currency markets. The dollar has fallen to a five-month low against the Japanese yen.

Last week, the euro increased by 4.5% against the greenback, its most rapid rise since 2009. A continuation of such trends would represent a sharp change after more than a decade of dollar strength, with consequences for monetary policy at home and abroad, international markets and global trade. Moreover, some in the administration want to go further.