Sadia Week 10: The Power of the Dollar



The U.S dollar stands as a powerful symbol of power, not just in the U.S but globally too. In The New York Times, morning post I read an article written by Patricia Cohen, titled "Dollar Flex". Cohen describes President Trump's two divergent thoughts on the American currency, "He wants a strong dollar" the one that is likely to be worth more compared to other countries, it's not just about pride, it's practical. It lowers the cost of borrowing money, especially with trillions of dollars in debt. While "On the other hand, he also wants a weak dollar" as this makes American products "cheaper" to buy abroad, which can help the manufacturing at "home". But it is not that easy. 

A strong dollar makes American goods overpriced for buyers abroad. I don't think I would but, why would you buy a $50 American-made gadget when there is a $30 option elsewhere? Meanwhile like I mentioned before, imports get cheaper for us, hence good for shoppers but not so good for local manufacturers. 

Trying to fix this problem is not that simple either. Tariffs, for example are supposed to make foreign goods less attractive, in price and help American businesses, but it can also backfire. "president can also steer the dollar's value more directly" but this can be done by either "ordering the Treasury Department to buy more of foreign currency" or "by pressuring" other countries to "revalue their own currencies".

Cohen also states that even though both of "Trump's goals" have their own benefits, it is not possible to achieve both of them at the same time. The dollar's value depends on the balance, It is strong and valuable but it is also complicated, even though the dollar's "status" is secure for now, Trump can still "take steps to weaken the dollar" and the problem that "most economists" believe is that his proposals, like initiating tariffs can "backfire" on that position.

Works cited

Cohen , Patricia . “Strong Dollar vs. Weak Dollar.” The New York Times , The New York Times , 27 Jan. 2025, www.nytimes.com/2025/01/27/briefing/donald-trump-currency.html. Accessed 28 Jan. 2025.

Crow, Alexis. “US Dollar Dominance amid Global Geo-Economic Fragmentation.” World Economic Forum, 31 July 2024, www.weforum.org/stories/2024/07/king-dollar-dethroned-usd-dominance-geoeconomic-fragmentation/.


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Comments

  1. Kaden KhauFebruary 5, 2025 at 9:15 PM

    Hi Sadia! Your blog describes a clear analysis on the complexities of the U.S. dollar's strength and how challenging it is to balance the economic policy. You highlight the the complexities between having a strong dollar for international power and a weak dollar to support domestic manufacturing processes. I agree that our country needs a strong dollar to make imports cheaper, but it also presents a challenge for U.S. manufacturers and them trying to compete globally. You illustration of point out the $50 item and the $30 dollar presents this very clearly. I think your blog overall presents a clear well structured analysis on the complexities of the U.S. dollar.

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