Viktor | RockawayX

Do not panic. Everything is going according to plan. Which plan? The one written by Stephen Miran, Trump’s chair of economic advisors in what is called the “Mar-a-Lago Accord.” (link below). 🧠 The idea:
🇺🇸 The dollar is structurally overvalued.
📉 It’s killing U.S. industry.
💥 Solution: weaken USD via coordinated or unilateral policy — and use tariffs as leverage.

Let me explain 👇

1. Tariffs as strategic instruments
Tariffs should be used not just for protectionism, but:
• As a source of revenue
• As a policy lever to counter currency misalignment
• To pressure trade partners to rebalance trade and defense contributions

2. USD devaluation
• USD is overvalued due to reserve currency status, harming U.S. competitiveness.
• Solution: Intentional dollar depreciation to boost U.S. exports and industry via signaling from FED and Treasury, and via multilateral agreements (à la 1985 Plaza Accord)

3. Trade policy as Foreign policy
• Trade and defense should be linked: if countries benefit from U.S. security, they must also accept fairer trade terms.
• Tariffs can be used to coerce economic burden-sharing from allies.

4. Offsetting tariff inflation with weaker USD
• Tariffs don’t have to be inflationary if the dollar weakens concurrently, reducing import costs in FX terms.
• Proposes a calibrated tariff + FX policy mix to avoid stagflation.

⚠️ Market implications:
• Weaker dollar
• Inflation offset via FX, not rates
• Realignment of capital flows + volatility ahead

💸 How to trade this (NFA):
🟢 USD down
🟢 Gold, BTC, industrials up
🟡 Rates stay elevated
🔴 Emerging Markets FX chaos
🔴 Eurozone pain

Here is the link to Stephen Miran's paper: https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/638199_A_Users_Guide_to_Restructuring_the_Global_Trading_System.pdf