Your editorial (“America’s astonishing act of self-harm”, FT View, April 4) accurately critiques the potential consequences of President Donald Trump’s sweeping tariff measures.
But while the protectionist rhetoric may seem erratic, it would be a mistake to view these moves as capricious.
They are better understood as one pillar of a broader macroeconomic playbook: an attempt to arm wrestle the international community into a Plaza Accord 2.0 while quietly engineering a strategic weakening of the US dollar.
The administration already appears to be leveraging global trade uncertainty and inflation risk to unsettle capital flows, prompting a gradual dollar sell-off.
Meanwhile, the recently signed Strategic Bitcoin Reserve and Digital Asset Stockpile order gives the Federal Reserve and Treasury new tools to funnel excess dollar liquidity — without boosting rival currencies like the euro or yuan.
These crypto-linked instruments now serve as a monetary pressure valve: helping to preserve dollar hegemony while discreetly redirecting part of the US debt burden on to crypto holders, as digital asset firms reinvest proceeds into risk-free US Treasury bills.
This is not protectionism for its own sake. It is a high-risk strategy to redirect trade flows, encourage the reshoring of technology-intensive production, and slow the erosion of the US current account — while avoiding a debt spiral and maintaining the dollar’s global role.
Yes, the strategy rests on retro mercantilist logic. Whether it succeeds is another matter. But it is neither erratic nor incoherent. It is disruption by design.
Professor Patrick Vanhoudt
Dean, Luxembourg School of Business, Luxembourg City, Luxembourg
