Donald Trump tariffs impact

Why the dollar fell after the announcement of the tariffs – And what does that mean to you

Based on axios reports. Adapted to readers of the American Dream Magazine – Editorial note from Edivaldo to Fontes

In the economy, some rules are considered right - as the idea that tariffs (Import Taxes) tend to strengthen the currency of a country. But this week, after President Donald Trump - now in his second term - announce new tariffs, The opposite happened: The dollar weakened.

Then, what is happening? Why the dollar is behaving in this way?

Let's explain simply.

What usually happens with tariffs

According to classical economic theory, When a country imposes rates on imported products, He tends to buy less from abroad. This means that fewer dollars are sent out to acquire foreign goods - that is, There is less dollar conversion to other currencies. With less dollars circulating in the global market, Its value tends to rise.

And that's exactly what many investors expected with Trump's announcement. The expectation was to strengthen the dollar. But, surprisingly, The coin fell.

Why the dollar fell anyway

Experts point out that the main reason was fear - especially the fear of a recession. There are concerns that these new rates can harm, instead of helping, the American economy. This made some investors rethink where to apply their money - and even withdraw resources from the country.

When investors move their capital out of the US, the demand for dollars falls - and with it, The value of the currency.

What the numbers say

An important index that measures the strength of the dollar compared to other large currencies has fallen to 102,1 After the announcement of the tariffs. It was a significant drop. Even with a slight recovery to 103 the next day, It is still below the level prior to the news.

According to Goldman Sachs, The dollar tends to lose value when the US economy slows down while other regions of the world grow. And this is precisely the scenario that may be forming.

Why investors are nervous

Some analysts believe that market restlessness is not just about recession fear-it is also confident. There is a growing concern that recent economic policy decisions are making the US a more risky destination for investments.

As an economist highlighted, when investors are not clear about the direction of American policies, especially in sensitive areas such as commerce and tariffs, tend to redirect their resources to other regions - such as Europe, Asia or Latin America.

The dollar can recover?

Sim, It is possible. The dollar can be strengthened again as markets adjust and new information arise. Even the economist who pointed out the recent fall admits that, long -term, tariffs can still strengthen the dollar - since the economy responds positively.

By ora, although, The market acts with caution. As President Trump said, For a recent bags are bags: "Markets will shoot ... the country will grow." However, for attentive investors, it will take more than optimism to restore confidence. The current moment calls for careful analysis.

What does that mean to you

If you live in the United States, A weaker dollar can have a direct impact on your daily life. Imported products, like electronics and clothing, can get more expensive. International trips will also cost more, since your dollars will be worth less abroad.

On the other hand, a weaker dollar can help US companies export more, because its products are cheaper for consumers from other countries.

The big question is whether the US economy - which was giving signs of growth - will maintain this trajectory. And how measures how these rates will shape this future. For now, The market signals caution: It's still early for certainty.

Editor's note

It is important to remember that market reactions - such as recent falls in the bags and the devaluation of the dollar - are often circumstantial, especially in periods of political and economic transition. After more than 25 years living and closely following the US economy, I consider this a natural and temporary response.

Tariffs are part of a common strategic game in international trade. Since the formation of blocks such as Mercosur and the European Union, The United States, as an economic power, frequently were at disadvantage in the face of barriers imposed by other countries. The decisions of the current administration reflect an attempt to correct this imbalance, through measures that may seem hard, but they are, in many ways, necessary.

That's why, It is wise not to draw hasty conclusions. The moment requires patience, attentive observation and strategic action. When dust downloads and the effects of these policies begin to manifest, we can more clearly evaluate both negative and positive impacts. The most prudent attitude now is to keep calm, act intelligently and not be carried away for fear, Not for the exaggerated optimism.

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