Devaluing US Dollar In Line with Trump's America First Trade Agenda: Expert

The devaluation of US Dollar (USD) aligns with President Donald Trump's 'America First Trade Policy', which seeks to reduce reliance on foreign imports and bolster exports, an Indian geopolitical observer Dr Ankit Shah, the conceiver of the ‘Sanatan’ Economics Model, has told Sputnik India.

"Without the devaluation of the dollar, BRICS and other Global South nations won't be able to buy American goods irrespective of the tariffs negotiations. President Trump has already indicated that Japan and China should not keep their currencies lower," explained Shah.

Shah's comments came as the Dollar Index fell to a four-month low this week, amid the ongoing global stock market correction, a new tariff war, fears of an imminent recession, and upcoming Consumer Price Inflation (CPI) projections from the US Bureau of Labor Statistics on Wednesday.

Trump revealed earlier this month that in a phone call he had asked Chinese President Xi Jinping, and Japanese Prime Minister Shigeru Ishiba to not "reduce and break down" their respective currencies.

"You can't do it because it's unfair to us. It's very hard for us to make tractors, Caterpillars here, when Japan, China and other places are killing their currency, meaning driving it down," Trump stated.

Meanwhile, Trump’s pick for the Council of Economic Advisors (CEA), Stephen Miran, argued in favour of devaluing the USD in a paper published last November. Miran argued that the root cause of the economic imbalances facing the US lay in the "persistent dollar overvaluation" which has prevented the balancing of international trade.

Although the USD hegemony had helped the American financial industry and helped it in enforcing unilateral sanctions against other countries, it had also reduced the export competitiveness of the US, increased the deficit burden and dealt a blow to American manufacturing, Trump's economic advisor noted.

Commenting on the ongoing stock market "correction", Shah said that the Trump administration seemed open to a "period of transition" in the US economy.

"In the short-term, the US President also wants to tax revenues from dollar assets made by foreign nations and wants them to instead use the dollars to buy goods from the US. This indicates that the Trump administration is open for stock market corrections," Shah explained.

He also cited a recent statement by US Treasury Secretary Scott Bessent, who has said that there would be a "detox period".

"Look, there's going to be a natural adjustment as we move away from public spending to private spending. The market and the economy have just become hooked, and we've become addicted to this government spending. And there's going to be a detox period," Bessent told CNBC in an interview earlier this month.

Shah also argued that despite Trump's threat to BRICS countries, the de-dollarisation of the global economy was only going to accelerate further.

"The tariff war effective April 2nd on India and China, the way allies are left to fend for themselves in the EU with looming defence cuts, the eventual wrap-up of the global policing role, and the gold accumulation by BRICS+ along with the US — all of these point to an accelerating dedollarisation process," he stated.

As of Wednesday, US Gold Futures were trading at a historic high of over $2,922.30, as private investors and governments increased their holdings of the yellow metal amid rising geoeconomic uncertainty.

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