Why the U.S. Dollar Will Remain Strong

(Gary Cameron/Reuters)
The president is irked by the dollar’s persistent strength, but he shouldn’t blame China or the Fed.

NRPLUS MEMBER ARTICLE T his month the Trump administration officially declared China a currency manipulator. This declaration, the latest salvo in the ongoing U.S.–China trade war, came after the Chinese government allowed its currency, the yuan, to fall to its lowest value in a decade. It is now trading at just over 7 yuan to a dollar.

The currency-manipulation designation is one of the most unwarranted charges volleyed against China by the Trump administration. The depreciation of the yuan was largely caused by market forces and, by most accounts, China has not been a currency manipulator since about 2012.

But the Trump administration’s concern over currency

(David Beckworth)

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David Beckworth is a senior research fellow with the Program on Monetary Policy at George Mason University's Mercatus Center, and a former international economist at the U.S. Department of the Treasury.

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