Donald Trump swept into his second term promising an “America First” revolution, vowing to restore economic might through tariffs, trade leverage, and tax cuts. Yet, barely three months in, the administration’s push for a weaker dollar—driven principally by adviser Stephen Miran—is risking monetary instability and inflation that could hit the working class Trump claims to champion hardest.
Stephen Miran, chair of Trump’s Council of Economic Advisers, may well be one of the main architects of this strategy. In his roadmap—A User’s Guide to Restructuring the Global Trading System—he argues the dollar’s strength hampers U.S. competitiveness, pitching bold moves such as a “Mar-a-Lago Accord” to engineer its decline.
While Robert Lighthizer, Trump’s first-term trade czar, has flagged the dollar’s strength as an export hurdle, he sticks to tariffs rather than endorsing deliberate devaluation; Trump himself touts tariffs to boost manufacturing, but Miran’s fixation on a weaker dollar is poison. It threatens to undermine the dollar’s role as the world’s reserve currency. With the dollar already sliding against gold and the DXY since January, Miran’s influence in driving policy demands scrutiny.
Since Trump’s inauguration, the dollar has weakened sharply against gold, the timeless benchmark of currency value. On January 20, 2025, gold was $2,700 an ounce; today, it’s $3,084—a 14% devaluation in just over two months. The dollar trade-weighted index (DXY) mirrors this slide, dropping from 109 to 104 year-to-date.
This isn’t a blip; it’s a warning.
In the 1880s, the U.S. wielded tariffs effectively because the dollar was tied to gold, fixed at roughly 1/20th of an ounce, providing a stable anchor regardless of tariff policies. Today, with a floating dollar and no such guardrails, the upcoming "Liberation Day" tariffs on April 2 may even be encouraging the dollar’s weakness at the margin—potentially amplifying investor concerns over trade disruptions and economic uncertainty. Already, the dollar’s decline—evidenced by soaring gold prices—hints at monetary inflation looming ahead.
History reinforces this: a dollar crumbling against gold often precedes broader weakness, especially in commodities and foreign currencies. The 1970s, when Nixon’s devaluation sparked stagflation, loom as a stark reminder. Pursuing a weaker dollar now risks repeating that mistake.
A weaker dollar drives up costs for imports and commodities such as oil, instantly hiking prices for gasoline, groceries, and everyday goods. This slams working-class voters—who fueled Trump’s victory—the hardest, eroding their purchasing power despite policies pitched as their lifeline. The Federal Reserve, seeing clear evidence of rising inflation will necessarily raise rates, tightening credit and slowing growth even more. A weakening dollar doesn’t deliver economic strength—it delivers more pain to America’s economic backbone.
Trump’s team might nod to the 1880s, when tariffs paired with prosperity. But the key difference is the gold standard, which kept the dollar steady then. Today, with no such anchor, the weaker dollar—confirmed by soaring gold prices—threatens stability. Tariffs and talk of a sovereign wealth fund may play a role in Trump’s strategy, but it’s the weaker dollar policy—a de facto policy disaster—that’s setting the stage for trouble. The administration must see the rising gold price for what it is: a blaring alarm, not a badge of honor. Trump promised economic might, not vulnerability. His team needs to ditch the weaker dollar obsession and prioritize stability—or risk turning “America First” into “America bruised.”.
