Dollar down 10% under Trump

The dollar is supposed to be the thing Americans do not have to think about. It is the default money in global trade, the fallback safe asset, the currency that usually makes foreign stuff feel cheaper, not pricier. But that cushion has thinned. Since early 2025, the dollar has fallen about 10% against a basket of major currencies, and the effects are starting to leak out of markets and into ordinary spending. ### Why does a weaker dollar matter? A weaker dollar means each dollar buys less foreign currency. That hits first when Americans travel abroad or buy directly from overseas sellers, but it does not stop there. Importers paying more for foreign goods often pass at least some of that cost along, so groceries, consumer goods, and anything with imported inputs can get more expensive over time. ### Why did the dollar fall this much? Currencies move on relative confidence — growth, interest rates, trade policy, political stability, and capital flows. The broad story here is that markets have become less enthusiastic about U.S. assets than they were in the long dollar boom that ran through 2024. Some analysts tied the 2025 drop to tariff shocks, policy uncertainty, and a sense that the old “buy America first, ask questions later” trade no longer looked automatic. ### Is 10% a big move? Yes — for a major reserve currency, that is a real shift. Morgan Stanley described the first half of 2025 as the dollar’s biggest first-half loss since 1973, with the dollar index down about 11% from January through June. That does not mean the dollar is collapsing or losing reserve status tomorrow. But it does mean the move is large enough to change pricing, margins, and investor behavior. ### Who actually benefits? Big U.S. multinationals can come out ahead. If a company earns euros, yen, or pesos overseas, those foreign profits translate into more dollars when the dollar is weak. Exporters also get a tailwind because their products become cheaper for foreign buyers. That is why a weaker dollar can look like a hidden tax on households and a quiet subsidy for globally diversified firms at the same time. ### Who gets squeezed first? Consumers and smaller domestic businesses. Households feel it in vacations, imported staples, and products with global supply chains. Smaller firms do not have the same hedging tools or foreign revenue streams that big multinationals have, so they eat more of the pain when import costs rise. The catch is that these price effects usually arrive gradually, which makes the currency move easy to ignore until it is already embedded in bills. ### Where does China fit into this? China just widened tariff-free access for African exports to 53 of Africa’s 54 countries, excluding only Eswatini because of its diplomatic ties with Taiwan. That policy took effect Friday and runs until April 30, 2028. On its own, that is a trade story. In context, it shows how other countries are moving to attract trade flows while the U.S. leans harder into tariffs. ### Why does that make this more than a currency story? Because exchange rates and trade policy reinforce each other. A weaker dollar can help U.S. exporters, but if U.S. tariff policy also raises costs and pushes trading partners to build alternative routes, the net result gets messier. China’s Africa move is a reminder that global commerce does not sit still while Washington experiments. ### Bottom line The important shift is not that the dollar fell on a chart. It is that the move is now big enough to redistribute pain and advantage. American households pay more at the margin. Multinationals get a cushion. And the rest of the world is already adjusting.