Weak dollar: Trump's economic policy on the verge of collapse!

Weak dollar: Trump's economic policy on the verge of collapse!

The US dollar has suffered a dramatic decline in value of over ten percent in the first six months of 2025, the largest decline since the decoupling from the gold standard in 1973. Experts attribute this decline mainly to the economic policy decisions of the Trump administration. In particular, Trump's protectionist trade policy and isolationist foreign policy are identified as key reasons for declining confidence in the US economy. it-boltwise reports that uncertainty about the future economic policy direction of the USA has further shaken confidence.

The current situation could also have serious consequences for inflation and the budget deficit. Experts warn of rising inflation and a growing deficit, which could further exacerbate challenges for the economy. A weak dollar has already led to higher costs for foreign travel and imports for American consumers. At the same time, a cheaper export situation could be in question as future customs policy remains unclear.

Economic developments and forecasts

Since Donald Trump took office, US economic policy has changed significantly. Economic institutions had to adjust their forecasts and the stock markets experienced significant fluctuations. How ZDF reported, economic indicators are starting to trend negatively. Although the US economy initially recovered after the corona pandemic, it showed signs of slowing at the end of 2024. Trump's tariff policies have led to a setback in economic growth, leading the International Monetary Fund to cut its 2025 growth forecast from 2.7% to 1.8%.

Inflation, which peaked in 2022, has been brought under control during Trump's current term but remains a concern. Inflation is currently not falling to previous levels and central banks are aiming for an annual inflation rate of two percent. Debt and prices are adding pressure to consumer sentiment, which remains low, similar to three years ago.

Impact on the investor perspective

The uncertainty surrounding the economic situation has led to international investors increasingly turning away from the US market. A weak dollar could also make it unattractive to invest in U.S. Treasury bonds, further complicating already tight financial conditions for the federal government. While some investors were initially optimistic, investors are now becoming increasingly unsettled. High interest rates and the economic consequences of tariff policies are additional factors contributing to concern.

Overall, the Trump administration faces the enormous challenge of regaining investor confidence and strengthening the U.S. economic fundamentals to minimize the impact on the global financial landscape. Despite initial measures, such as the partial withdrawal of threatened tariffs, the decline in the value of the dollar continues; A return to stable economic conditions appears to be a long way off.