An overvalued dollar has significantly hampered US manufacturing by making exports expensive and widening global trade imbalances.
The 1985 Plaza Accord tackled this challenge through a coordinated effort among major economies to devalue the currency and boost competitiveness. Now a new proposal — dubbed the Mar-a-Lago Accord — suggests leveraging tariffs and adjustments in military support to induce foreign cooperation in devaluing the dollar while addressing soaring debt service costs.
However these radical measures risk eroding investor confidence and destabilizing long-standing global financial systems.
This potential pivot in US economic policy could reshape its role in international trade and finance, heralding profound changes in the global marketplace.