Devaluing a currency is a well known strategy to boost exports. But it might also be useful to reduce imports and build up a local economy. I am wondering if anyone has heard of any discussion of plans to manipulate the future value of the $USD? Will the government print money to reduce the cost of its debt?
So the goal of tariffs is to cause an increase in the value of non-US currencies, which will balance out the trade deficit.
I suspect it will split the world into trading blocs.
The classic way to devalue a currency is to print money (increase money supply). But what Trump seems to be doing is reducing government expenditure, which will have a deflationary effect. Tariffs might cause more demand for US products in the US??? which might offset deflation?
I don’t really understand how central bankers in non-US countries use $USD. I suppose they buy T-bills and hold them. ??? Apparently this is the underlying problem keeping the $USD high???