Trump's economic plan, the "Mar-a-Lago Accord," aims to devalue the dollar and reshape the economy
From Yahoo Finance: 2025-03-31 08:27:00
President Trump may have a bold plan beyond tariffs, called the “Mar-a-Lago Accord,” to reshape the US economy by devaluing the dollar and refinancing US debt. While many doubt the feasibility, investors are intrigued by the potential impact on global capital flows. Trump’s appointment of Stephen Miran to the White House Council of Economic Advisers has fueled speculation about this plan. Miran’s proposal to devalue the US dollar aims to address chronic trade deficits and bring manufacturing back to the US, despite skepticism from economists.
The current strong US dollar has led to record trade deficits, with imports becoming cheaper and exports more expensive. While Trump views the trade deficit as detrimental, economists debate its impact on the economy. Some argue that a strong dollar benefits the US, providing privileged access to global markets and promoting economic stability. Manufacturing decline is a global trend, with automation and technology driving productivity gains despite job losses in the sector.
Trump’s focus on manufacturing in his economic strategy contrasts with the service economy that employs the majority of American workers. The fetishization of manufacturing overlooks the significance of other sectors like services in the US economy. Despite challenges, the US has maintained a robust economy, with a focus on blue-collar jobs and trade imbalances potentially disrupting this stability.
Trump’s ambitious plan to devalue the US dollar through the “Mar-a-Lago Accord” faces skepticism due to its complexity and potential risks. Coercive measures to reduce foreign investment in US assets could trigger higher interest rates and disrupt financial markets. The plan’s convoluted nature and potential economic fallout raise concerns among economists and investors about its feasibility and consequences.
Economists suggest alternative approaches to address trade imbalances and economic challenges, emphasizing sustainable fiscal policies and investment in growth industries. Trump’s reliance on tariffs and potential currency interventions raises uncertainties about the long-term impact on the economy. The intricate nature of proposed measures to devalue the dollar highlights the complexity and potential risks associated with Trump’s economic strategy.
Read more: The Trump economic plan that could be much riskier than tariffs