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NewsPBS NewsHourMay 4, 2026United States

How the Weaker U.S. Dollar Affects Your Wallet

The U.S. dollar has fallen approximately 10% against other major currencies since the start of President Trump's term. This decline can increase the cost of imported goods and foreign travel, while potentially benefiting large multinational corporations that earn revenue abroad.

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Why It Matters

A weaker dollar acts as a 'hidden tax' by increasing the cost of imported goods and international travel for American consumers, while creating different financial pressures for domestic versus multinational businesses.

Key Facts

  • The U.S. Dollar Index has fallen approximately 10% since the start of President Trump's term.
  • The first half of 2025 saw the steepest six-month drop in the U.S. Dollar Index in over 50 years.
  • The dollar has weakened by approximately 16% against the Mexican peso compared to early 2025.
  • Coffee prices in the U.S. have risen nearly 19% in the past year, partially influenced by currency fluctuations against the Brazilian real.
  • Multinational corporations often report higher profits when the dollar is weak due to favorable currency conversion on foreign earnings.
  • Domestic businesses that rely on imported raw materials, such as bait for lobster fishing or medical supply components, face increased operating costs.
  • Economists estimate that only 5% to 10% of a currency's value decline is typically passed on to consumers in the price of imported goods.
  • President Trump has publicly stated a preference for a weaker dollar, arguing it helps American industry and exports.

Who's Mentioned

organizationAmerican Institute for Economic Research“Conservative-leaning economic research organization.”organizationPhilip Morris“Multinational corporation reporting favorable currency impacts.”personKenneth Rogoff“Harvard University economist and former IMF chief economist.”organizationCoca-Cola“Multinational corporation reporting favorable currency impacts.”personTravis Madeira“Founder of LobsterBoys, a domestic lobster-shipping business.”personDavid Navazio“CEO of Gentell, a medical supply company.”personThomas Savidge“Economist at the American Institute for Economic Research.”personDonald Trump“President of the United States whose policies and statements are linked to the d”personElie Maalouf“CEO of InterContinental Hotels.”