The U.S. dollar’s value has fallen 8% over the past year, as the price of gold has skyrocketed, said the WSJ Dollar Index. Some think it is a good thing.

President Donald Trump said recently a weaker dollar is “great.” The idea is a weaker currency boosts exports and employment while a strong currency can throttle an economy.

While the idea of a weaker dollar has had supporters over the decades, economists often argue gains can be eaten up by domestic inflation and deflation.

A weaker dollar could help U.S. manufacturers compete by becoming less expensive to foreign buyers, and boost tourism. Yet it also means goods imported from abroad can become more expensive. Traditionally, the U.S. imports more from abroad than it exports.

Question: Is a weaker U.S. dollar a good thing?

Economists

James Hamilton, UC San Diego

NO: A cheaper dollar would provide stimulus by encouraging sales of U.S. exports but would aggravate inflation by raising the price of imported goods to firms and consumers. Inflation is a bigger concern for me at the moment, so I see the dollar weakness as a slight negative. Moreover, the reason for the weaker dollar is a loss of faith in the United States government. That is not a good thing.

Caroline Freund, UC San Diego School of Global Policy and Strategy

YES: A weaker currency can help the economy by boosting exports and discouraging imports. But the gains are uneven: consumers lose as imported goods and foreign travel become more expensive. And the U.S. dollar’s role as the world’s reserve currency, an economic and strategic advantage, makes it more complicated. If the dollar weakens because of erratic U.S. policies and foreign investors shunning U.S. assets, the damage will far outweigh any trade benefits.

Kelly Cunningham, San Diego Institute for Economic Research

NO: The dollar reflects perceived value. Trade deficits and foreign investment surplus show voluntary market transactions from which each party expects to benefit, or the transactions would not occur. Both sides generally benefit by trading for perceived value. We benefit from making the transaction and foreigners making the trade think they benefit. For the most part, voluntary market transactions make both sides better off than they would be without trading. A weaker U.S. dollar reduces our capability.

David Ely, San Diego State University

NO: With a weaker dollar, imported goods and traveling abroad become more expensive for U.S. consumers. U.S. companies pay more for components and materials sourced from abroad, which can lead these organizations to raise prices on the products they sell and diminish their competitiveness. The cause of a weaker dollar should also be considered. Disruptive tariff policies and pressuring the Fed to lower interest rates are troubling reasons behind the decline in the dollar’s value.

Alan Gin, University of San Diego

NO: A weaker dollar will help the economy by boosting exports, which will help some with employment. But it will add to the problem of inflation by making imports even more expensive. But the big problem is why the dollar is weakening. Foreign investors are losing faith in the U.S. and its policies. That could threaten the dollar’s status as the world’s primary reserve currency, which would weaken the U.S. financial system and make it more expensive to finance the federal deficit.

Norm Miller, University of San Diego

NO: A weaker dollar affects consumers negatively and adds to inflation. Those who say it will help our manufacturing sector sell things abroad should remember that, with the exception of farmers, already nailed by retaliation for our tariffs, most U.S. producers, like car makers, buy parts and components from abroad as inputs into our finished goods, and these will be more expensive. All things considered the negatives outweigh the positives.

Ray Major, economist

YES: But within reason. There are both positives and negatives related to the strength of the dollar. A weaker dollar boosts exports and supports the manufacturing base that the administration is trying to bolster. It helps increase corporate profits leading to a stronger stock market and encourages U.S. tourism. Furthermore, the weaker dollar supports also the current administration’s economic and financial goals. With that said, there are an equal number of downsides to a weaker dollar.

Executives

Chris Van Gorder, Scripps Health

NO: However, the answer is really, it depends. In moderation, a weaker dollar can be good as it could help manufacturing, improve the trade balance and promote growth. But if the dollar is too weak, it can trigger inflation and undermine confidence in U.S. leadership. From a health care perspective, a weaker dollar usually means higher supply costs, higher wage pressure and more difficult inflation management.

Gary London, London Moeder Advisors

NO: My attention is laser focused on the impact to U.S. consumers. On that score, a weaker dollar is a loser because imports become more expensive, and yes, that’s inflationary. In a politically charged “affordability” crisis environment, how can this be a good thing? Aren’t erratic tariffs quite enough?

Bob Rauch, R.A. Rauch & Associates

NO: There are some short-term advantages to a weak dollar, as U.S. exporters benefit when their goods become cheaper abroad. This includes tourism, an export industry. Foreign earnings of U.S. multinationals translate into more profits. International assets become more attractive for U.S. investors due to currency appreciation. However, rising import costs increase costs for U.S. consumers and businesses. Additionally, Inflation pressures increase, especially for goods sourced abroad. Lastly, global confidence could erode, as we have long maintained a strong-dollar policy.

Phil Blair, Manpower

NO: In these turbulent times of flaky tariffs and promises made and broken, the U.S. monetary policy needs to stay strong and dependable.

Jamie Moraga, Franklin Revere

NO: A strong U.S. dollar is vital, especially for national security. A weaker dollar can signal economic instability or erode global confidence in the U.S. economy. Without “dollar dominance,” the U.S. could struggle to fund its defense budget and maintain a sustainable global military presence. Losing that footing would weaken American influence globally and embolden adversaries. While there may be short-term upsides, the long-term consequences far outweigh any perceived benefits.

Austin Neudecker, Weave Growth

NO: While a weak dollar benefits exporters and tourism, the U.S. imports far more than it exports. Higher import prices fuel inflation, impacting households and companies that rely on foreign inputs, energy and equipment. Any proposed boost fades as wages and prices adjust. A stable, credible currency not only supports purchasing power and investment but also maintains our vital position as the global reserve currency. America’s competitiveness should come from productivity and logistics, not depreciation.

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