Posted on May 08, 2025 at 07:48. / Modified on May 08, 2025 at 13:20.
3 min. reading
One in three Thursdays, economist Charles Wyplosz returns to a financial or macro-economic event.
Find here All his chronicles
Like many people in Switzerland, Trump and his influential advisers think that a refuge currency is expensive. They want to put an end to the international dollar status by discouraging its acquisition and detention by all these foreigners who have benefited from American generosity for decades. By buying dollars, they push for the appreciation of the exchange rate, which penalizes American companies and digs the external deficit. This erroneous reasoning risks sustainably weakening the American economy.
-The ideas circulating in Washington are based on the enormous increase in customs duties already in place and on the threat of a new, simply obscene increase. To escape it, each government must come to Washington and offer concessions. Cunning, Trump does not specify the concessions he awaits, they must be guess. Reducing dollars’ detention is one of the many subtly phoned wishes. The method is described in an “independent” report written by the official economic advisor of the White House which, still anxious to flatter the president, entitled it “Mar-A-Lago agreement”. Basically, they want the central banks, all of which hold reserves in dollars, sell these dollars. Suddenly, the exchange rate will be depreciated. Mission accomplished? No way.
