How A Weaker Dollar Is Quietly Making Life More Expensive

A hidden unit is softly pushing up costs for everything from your summertime picnic to your play market bills: a weaker U.S. dollar.

The dollar has fallen astir 10% against different awesome currencies since President Donald Trump returned to nan White House, a pullback perchance playing a domiciled successful Americans’ concerns astir affordability.

“It’s benignant of a hidden tax,” says economist Thomas Savidge of nan conservative-leaning American Institute for Economic Research. “What your dollar is going to beryllium capable to bargain is going to shrink.”

A look astatine wherever nan dollar stands and what it intends for you:

Historic dollar diminution

The U.S. Dollar Index, which measures nan greenback against different awesome currencies, logged its steepest six-month driblet successful much than 50 years successful nan first half of 2025. Though nan diminution hasn’t deepened, nan dollar scale is still astir 10% little than nan commencement of Trump’s term.

A beardown dollar makes imports cheaper and tin thief support ostentation successful check. A anemic 1 tin summation prices connected overseas equipment but boost American exports.

U.S. presidents person agelong voiced support for a beardown dollar moreover arsenic they pursued policies that, astatine times, pushed nan rate lower. Trump has suggested a beardown dollar puts nan U.S. astatine a disadvantage and that a anemic dollar helps American industry. And arsenic pinch astir things pinch Trump, he's been blunter successful his messaging.

“You make a hellhole of a batch much money pinch a weaker dollar,” he said past year, 1 of a number of nationalist statements showing his penchant for seeing nan dollar decline.

Big multinationals use

Trump isn’t unsocial successful seeing benefits of a weaker buck.

In caller months, firm net calls person been peppered pinch talk of really a weaker dollar has helped companies from Philip Morris to Coca-Cola, pinch executives pulling retired C-suite phrases for illustration “favorable rate impact” to statement really nan dip brought tailwinds extracurricular nan U.S. that added to bottommost lines.

“In galore cases, we’ve sewage a weaker dollar, which is not unhelpful,” Elie Maalouf, nan CEO of InterContinental Hotels, said connected a February telephone arsenic nan institution announced higher profits and revenues.

For large multinational companies that do business overseas, a weaker dollar tin spur income for products that abruptly go cheaper. But nan immense mostly of U.S. businesses are not operating beyond nan border. For those catering to home customers, it's a different story, peculiarly if they are reliant connected importing goods.

Travis Madeira, a fourth-generation lobsterman who founded nan lobster-shipping business LobsterBoys pinch his brother, makes astir 80% of his income to Americans, dissimilar immoderate competitors who chiefly export.

“The exporters are gonna person nan advantage erstwhile it comes to nan dollar weakening,” says Madeira, who is paying much to import bait and bargain Canadian lobsters. “These guys are gonna person a small spot of a lever connected us.”

Smaller companies wounded

Even among companies that do person a beingness extracurricular nan U.S., nan dollar's autumn tin person an impact. While galore large companies hedge rate to effort and insulate themselves aliases push much income overseas, smaller businesses are often much susceptible to nan turbulence.

David Navazio, CEO of Pennsylvania-based Gentell, which makes bandages and different aesculapian supplies, operates plants successful Brazil, Paraguay, Canada, New Zealand and nan United Kingdom. In each location, nan dollar has fallen, expanding Gentell’s costs.

Gentell has had to raise immoderate prices to bespeak nan rate fluctuation, which stacks connected apical of different challenges, including tariffs and war-related spikes to substance costs.

“A twelvemonth ago, nary of these were concerns,” he says. “And it ever hurts nan consumer.”

Other currencies emergence

For nan American consumer, nan reality of a declining dollar is astir evident during overseas recreation aliases erstwhile making a acquisition straight from an world seller.

Cross nan separator into Mexico, nan apical overseas destination of Americans, and your dollar is astir 16% weaker versus nan peso compared pinch early 2025. Declines of astir 10% to 17% person been recorded elsewhere, including against nan Swiss franc, South African rand, Danish krone, Swedish krona and nan Euro.

As for equipment imported to nan U.S., location is an impact, but it's harder to gauge. Many economists estimate that, successful precocious countries for illustration nan U.S., only astir 5% to 10% of a rate dip is passed connected to consumers.

But they are an added accent erstwhile prices are already affected by different factors.

Take coffee, 1 of nan market items that has seen nan biggest value hike successful nan past year. Brazil is nan biggest root of java for nan U.S. and nan dollar has fallen astir 13% versus its real. Currency fluctuations tin deed harder successful processing economies and, while only a fraction of nan alteration whitethorn provender into coffee’s ballooning price, each spot tin heap up. Coffee prices are up astir 19% successful nan U.S. successful nan past year, according to authorities data.

Expect much activity

Currency values are perpetually moving and, while nan dollar’s caller autumn is notable, it has reached little levels astatine points successful nan presidencies of each of Trump’s predecessors, backmost done nan creation of nan Dollar Index successful 1973, erstwhile Richard Nixon was astatine nan helm.

Kenneth Rogoff, a Harvard University economist and erstwhile main economist astatine nan International Monetary Fund, says while “a batch of policies that Trump is doing are thing of a crab for nan dollar,” he believes that it was destined to autumn nary matter who was successful charge.

“The dollar had been connected a 15-year bull run,” he said. “I would reason nan dollar is still wildly overvalued, and complete nan adjacent possibly 5 aliases six years, it mightiness autumn 15%.”

What does that mean for American consumers? Rogoff says commodity prices are apt to rise, peculiarly pinch nan effect of nan Iran warfare connected substance prices.

“They’re conscionable going to spell up,” he says, “no matter what nan dollar’s at.”

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Matt Sedensky tin beryllium reached astatine msedensky@ap.org and https://x.com/sedensky