Donald Trump has drawn scorn from economists for his threats to launch a trade war with China and to renegotiate the terms of US sovereign debt. Less noticed, however, have been the Republican presidential candidate’s apparent threats to dismantle another decades-old American orthodoxy: the “strong dollar” policy.
The property developer has been consistent in recent months in warning against a strong exchange rate, even though the US has — notionally at least — adhered to a “strong dollar” policy since the 1990s.
In August last year Mr Trump declared the dollar was “hurting” the US and leading to “huge disadvantages” for companies’ competitiveness. “It sounds good to say ‘we have a strong dollar’. But that’s about where it stops,” he told one interviewer.
Mr Trump doubled down on that message earlier this month, saying that while he loved the concept of a strong dollar, it risked causing havoc for the US economy while delighting China, which he and others accuse of engaging in years of currency manipulation aimed at gaining a competitive advantage over American manufacturers.
To some in the Washington economic policy establishment this is dangerous talk.
“I think if Donald Trump is elected president we should very much expect that his administration would use exchange rate policy to try and get a smaller trade deficit,” said Robert Kahn, a senior fellow at the Council on Foreign Relations who served as a senior official at the US Treasury under then treasury secretary Robert Rubin.
Such a policy would likely lead to retaliation by trading partners, argued Mr Kahn, potentially resulting in lower growth, weaker trade and a weaker dollar. It could also undermine the status of the dollar as a global reserve currency.
Ted Truman, a fellow at the Peterson Institute for International Economics and former head of the Federal Reserve’s international finance division, said if the words become a key pillar of Mr Trump’s campaign, they could start to impact financial markets. “The best thing to do is say nothing at all,” he said.
US presidents have generally avoided commentary on the dollar or repeated variations of the phrase first coined by Mr Rubin in 1995 that “a strong dollar is in the interest of the United States”. The main reason is the view that it is counterproductive to try to fine-tune currency policy by attempting to talk up or down the value of dollar.
Marc Chandler, global head of currency strategy at Brown Brothers Harriman, said there had been broad continuity in the US executive branch’s currency strategy through the Clinton, Bush and Obama regimes. “Trump could change that,” he added.
Asked on Friday about Mr Trump’s comments on the dollar, Jack Lew, the treasury secretary, deployed his mantra that the strong dollar was a reflection of the US’s relative strength. “If other countries move towards competitive devaluation it will start a chain reaction,” he said at a Washington breakfast. “Pretty soon you are in a battle over shares of a shrinking global pie.”
Yet in reality, US officials’ strong dollar rhetoric has tended to accompany private concerns when a rising currency has been hurting US exporters. That has certainly been the case in recent years, with the dollar’s gains playing a role in inhibiting the Fed from increasing rates more rapidly.
In March 2015 Janet Yellen, the Fed chair, said the currency’s level reflected in part the strength of the US economy, but added that it was one reason for a weakening in export growth, which she expected to exert a “notable drag” on the economy. In March this year the Fed pared back its forecasts for rate increases, citing global economic and financial risks — central to which is a surging dollar.
The Fed was also accused of setting off an international currency war in the wake of the 2008 crisis after it used quantitative easing to increase the monetary supply, which had the effect of weakening the dollar.
Some economists are less critical of Mr Trump’s views on the dollar. “Mr. Trump’s repudiation of the strong dollar mantra certainly elevates economic realism over empty rhetoric,” said Eswar Prasad, an economist and author of “The Dollar Trap”, a book about the greenback’s rise as a global reserve currency.
“His symbolic delinking of dollar strength from US economic strength could have the salutary effect of liberating future presidential candidates and Treasury secretaries from having to make ritualistic commitments to a strong dollar”.
美国对外关系委员会(Council on Foreign Relations)高级研究员、曾在罗伯特?鲁宾(Robert Rubin)担任财长期间任财政部高级官员的罗伯特?卡恩(Robert Kahn)说：“我认为，如果唐纳德?特朗普当选总统，我们应当做好这样的心理准备，特朗普政府会利用汇率政策，设法缩小贸易赤字。”
彼得森国际经济研究所(Peterson Institute for International Economics)研究员、美联储(Fed)国际金融部门前负责人特德?杜鲁门(Ted Truman)表示，这些言论如果成为特朗普竞选运动的重要纲领，它们或将影响金融市场。“最好的办法是什么都不说，”他说。
布朗兄弟哈里曼银行(Brown Brothers Harriman)全球外汇策略主管马克?钱德勒(Marc Chandler)表示，在克林顿(Clinton)、小布什(Bush)以及奥巴马(Obama)当政期间，美国行政分支的汇率战略一直基本保持连贯。“特朗普可能改变这种状况，”他补充道。
对特朗普关于美元的看法，有些经济学家态度较为温和。经济学家、《美元陷阱》(The Dollar Trap)一书作者埃斯瓦尔?普拉萨德(Eswar Prasad)说：“特朗普对强势美元政策的驳斥，无疑坚持了经济现实主义，摒弃了空洞的言辞。”《美元陷阱》讲述了美元崛起成为全球储备货币的历程。