Mnuchin: Trump Tariffs Won't Weaken Dollar Long-Term

U.S. Treasury Secretary Steven Mnuchin on Friday addressed concerns that President Donald Trump's tariffs could weaken the dollar, asserting that the U.S. would maintain a strong dollar in the "long term." Mnuchin emphasized that while the dollar's exchange rate against other currencies may fluctuate, a strong economic foundation would ensure that the dollar performs exceptionally well. He made these remarks during an online broadcast of the Tucker Carlson podcast, recorded on April 3.

Mnuchin's comments came in response to market reactions following Trump's announcement of some of the highest tariffs in a century, which triggered a sell-off in U.S. stock markets and a decline in the dollar's value against major global currencies. Despite these short-term fluctuations, Mnuchin reiterated the administration's commitment to a strong dollar policy, a stance that has been consistent under Trump's leadership. However, Trump has previously criticized the dollar's strength, arguing that it harms U.S. manufacturing.

In addition to Mnuchin's remarks, the White House's chief economic advisor, Stephen Miran, dismissed growing concerns on Wall Street about an impending economic recession. Miran argued that Trump's deregulation efforts and tax cuts would offset any negative impacts from the tariffs, and that market volatility is a normal occurrence. He highlighted that the administration's comprehensive policy agenda is driving economic prosperity, which will eventually boost financial markets.

Miran also noted that the administration's policies are designed to enhance the U.S.'s competitiveness on the global stage. He pointed out that imports account for only 14% of the U.S. economy, suggesting that significant changes would be required for the tariffs to lead to a recession. Miran expressed confidence that the administration's approach will result in long-term economic growth and stability.

Mnuchin's statements were made against a backdrop of increasing global market uncertainty, particularly due to escalating trade tensions between the U.S. and China. Despite these challenges, Mnuchin expressed confidence in the U.S. economy's resilience and its ability to maintain its global leadership position. He also mentioned that the administration is collaborating with allies to address trade imbalances and promote fair trade practices.

Market participants generally welcomed Mnuchin's remarks, viewing them as a sign of the administration's dedication to maintaining a strong dollar and fostering economic growth. However, some analysts have raised concerns about the potential short-term impacts of the tariffs on the U.S. economy, including higher prices for consumers and businesses, as well as potential retaliatory measures from other countries.

Mnuchin's comments also come as the Federal Reserve considers whether to raise interest rates in the coming months. While the Fed has indicated that it is not in a hurry to raise rates, some analysts believe that the central bank may need to act if inflation continues to rise. Mnuchin's remarks suggest that the administration is prepared to collaborate with the Fed to ensure that monetary policy supports economic growth.