“The European single currency rose by a cent to $1.093, breaching the $1.09 barrier for the first time since Donald Trump won the presidential race. Sterling hit $1.295, its highest since 8 November.” (…)
“The “Trump trade” that sent the dollar soaring after his victory has unwound, as the imposition of US tariffs against Canada, Mexico and China and the threat of levies against European trading partners have triggered fears of an American recession.”
according to at least Varoufakis, that’s actually part of the plan.
I don’t pretend to be smart enough to understand this completely but the way I get it: if the dollar depreciates and (eg) the Euro becomes stronger, then people in the EU will find it more convenient to buy US goods, basically offsetting the effect of the tariffs that the EU has applied to counter US ones.
On the reverse, US tariffs + strong Euro will make it even less convenient for people in the US to buy goods from the EU. This, in Varoufakis’s interpretation of Trump’s plan, will help rebalance the trade deficit of the US vs these other countries.
But this makes everything in the states cost more too.
That’s a feature not a bug. If tariffs increase import prices by 10%, people are less likely to notice a 15% increase at the point of sale. Not to mention domestic products that despite not being subject to tariffs will still increase in price to come in just below imports.
All of this is designed to put more money in the oligarchs’ pockets.
This would also have the effect that the USA work force is mainly useful for low wage labor, would it not? Basically turning the USA back into a third world country that can be exploited for cheap labor. But I guess that is what so many USA citizens would like and vote for 🤷♂️