The US (well Trump and his supporters) want to make American manufacturing competitive in foreign markets in order to draw more investment into new domestic manufacturing capacity.
A huge hurdle for American manufacturers is that their products simply cost too much, all else being equal, because the value of the dollar is too high.
So their plan is try and devalue the dollar while also keeping it the reserve currency. To put that another way, he wants countries that have invested in the dollar to take a hit on their investments while also getting their population to buy more American goods.
His negotiations will probably center around offering continuation of "America world police" services (people hate it, but governments love it) in exchange for following this path.
Whether or not this will work? Who knows, but at least that is the idea they have chosen.
World police is also not an argument anymore. Noone has faith into current US administration. They simply can walk away from their allies or even stub into their back.
His trade deficit calculations also reflects this, and he gets pissed off when someone like Canada or the EU call him out on it. Canada’s digital services tax modeled after Europe, for example, was a non-starter for the Trump admin even though he didn’t bother to include services in his trade deficit calculations.
I don't understand why this is downvoted, I think people are thinking you are promoting a view, while you are non-judgmentally guessing.
And I do agree with you, I think the current administration is focused on devaluing the dollar, while trying hard to minimize collateral damage such as higher rates.
I don't think this is going to work, but I can see a lot of ways in which it could. Future will tell us.
A huge hurdle for American manufacturers is that their products simply cost too much, all else being equal, because the value of the dollar is too high.
So their plan is try and devalue the dollar while also keeping it the reserve currency. To put that another way, he wants countries that have invested in the dollar to take a hit on their investments while also getting their population to buy more American goods.
His negotiations will probably center around offering continuation of "America world police" services (people hate it, but governments love it) in exchange for following this path.
Whether or not this will work? Who knows, but at least that is the idea they have chosen.