Trump Advisers Propose Dollar Devaluation to Shrink Trade Deficit

Former Trump administration officials, including Robert Lighthizer, are reportedly planning to devalue the U.S. dollar to boost exports and reduce the trade deficit, a move fraught with economic risks.

• Reports indicate Trump's team is considering devaluing the U.S. dollar to make American exports cheaper and reduce imports, potentially boosting the economy short-term but posing long-term risks.
• Economic experts warn that such a strategy could lead to higher inflation, negatively affect global trade relationships, and threaten the dollar's status as the world reserve currency.
• Devaluing the dollar could also result in retaliatory measures from other countries, leading to a potential cycle of devaluation and economic instability.
• The plan could face significant opposition from Wall Street and economic policymakers, given its potential to disrupt global markets and U.S. economic stability.
• Structural reforms, rather than currency manipulation, are suggested as a more sustainable approach to addressing the U.S. trade deficit.

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