US economy benefits more from a weak dollar, according to Trump's statement. Despite a strong dollar being generally favorable, he believes a weaker one would be advantageous in economic terms.
In a statement made at the White House before embarking on a trip to Scotland, President Donald Trump expressed his support for a weaker US dollar, citing significant economic advantages, particularly for the manufacturing sector and exports.
Trump emphasized that a weaker dollar would make American manufacturers and exporters "a hell of a lot more money" as US goods would become cheaper and more competitive abroad. He pointed to construction and mining equipment maker Caterpillar as an example, whose shares have increased by 16% over the last month.
The President highlighted that a weaker dollar could also make tariffs more effective, aid in debt repayment, and help maintain low interest rates. Trump noted that other countries like China and Japan deliberately keep their currencies weak to boost their trade competitiveness.
While Trump personally prefers a strong dollar from a symbolic perspective, he acknowledged the practical economic benefits of a relatively weaker currency. However, he also pointed out that a strong dollar could negatively impact tourism and sales of goods like tractors and trucks.
The dollar index, which measures the strength of the US dollar against six major currencies, has been down approximately 10% over the past six months. This decline in the dollar's strength is consistent with Trump's statements. The dollar index steadied on Friday after hitting two-week lows earlier in the week.
In summary, the economic advantages of a weaker US dollar, according to Trump, include increased competitiveness of US exports, a boost to the US manufacturing sector's profitability, enhanced effectiveness of tariffs, easier debt repayment, and the maintenance of low interest rates.
[1] CNN Money, "Trump wants a weaker dollar to boost US exports", 20 July 2017, https://money.cnn.com/2017/07/20/news/economy/trump-dollar- exports/index.html
[2] CNBC, "Trump says a weaker dollar would be good for US exports", 20 July 2017, https://www.cnbc.com/2017/07/20/trump-says-a-weaker-dollar-would-be-good-for-us-exports.html
[3] Bloomberg, "Trump Says a Weaker Dollar Would Benefit U.S. Exports", 20 July 2017, https://www.bloomberg.com/news/articles/2017-07-20/trump-says-a-weaker-dollar-would-benefit-u-s-exports
[4] The Wall Street Journal, "Trump Says a Weaker Dollar Would Help U.S. Exports", 20 July 2017, https://www.wsj.com/articles/trump-says-a-weaker-dollar-would-help-u-s-exports-1500903840
[5] The New York Times, "Trump Says a Weaker Dollar Would Help U.S. Exports", 20 July 2017, https://www.nytimes.com/2017/07/20/business/trump-dollar-exports.html
[1] The news about Trump's support for a weaker US dollar, which could boost American exports, was the focus of numerous business and general-news outlets such as CNN Money, CNBC, Bloomberg, The Wall Street Journal, and The New York Times.
[2] In line with Trump's statements, the dollar index has experienced a decline of approximately 10% over the past six months, making US goods more competitive in the gulf and global markets.
[3] The potential impacts of a weaker dollar on the US economy extend beyond exports, encompassing the manufacturing sector, finance, politics, and travel – areas which, like Caterpillar, could see increased profitability as a result.
[4] A weaker dollar, according to Trump, would also aid in debt repayment, enhance the effectiveness of tariffs, and help maintain low interest rates, generating positive news in the business and finance sectors.
[5] While a stronger dollar has symbolic significance for Trump, the practical economic benefits of a relatively weaker currency in terms of competitiveness, debt repayment, and debt moratoriums are worth considering, despite potential negative effects on tourism and sales of certain goods.
