Students For Liberty

Let’s start with the current system: The U.S. dollar is the global reserve currency. That means foreign countries want to hold dollars—not to buy U.S. goods, but to settle debts, buy oil, and build financial reserves. Result? Massive demand for dollars.

To meet that demand, the U.S. must send dollars abroad. How? By running trade deficits. America imports more than it exports—and pays in dollars. In exchange, the world sends real goods and services to the U.S.

This sounds like a sweet deal—and it is. The U.S. ships green paper overseas. In return, it gets computers, cars, clothes, iPhones, and oil. That’s not exploitation. That’s privilege. But there’s a catch…

This system lets the U.S. live beyond its means—without feeling the pain. You can run massive deficits, overregulate your industries, and kill productivity with red tape and union roadblocks… And still get away with it. Because the world wants your dollars—no matter what.

The problem isn’t the dollar system. It’s that this system lets bad domestic policy go unpunished. Instead of fixing spending, regulations, and broken institutions… …the U.S. just borrows and imports more.

Trump’s plan? Keep the privileges of dollar dominance— Without suffering the downsides of an uncompetitive export sector. That’s like eating five Big Macs a day and expecting to win a marathon. So he’s using tariffs as a monetary weapon.

What does that mean in practice? By taxing imports, Trump makes the dollar less attractive—indirectly weakening it without touching its reserve status. He hopes this will boost U.S. exports and bring some production back home. But it’s a blunt instrument.

Why? Because it externalizes the costs. Instead of reforming domestic policy… Trump shifts the pressure onto U.S. allies and trading partners. That’s not monetary reform. It’s monetary coercion.

And the more Trump weaponizes trade… …the more uncertainty he injects into the global economy. Markets know it: 📉 S&P 500 dropped 📉 Apple, Google, Amazon fell 📉 Nvidia & TSMC tanked This isn’t a trade war. It’s a currency proxy war.

Trump’s tariffs don’t fix the core problem. You can’t reshore industry with taxes alone. Because the issue isn’t trade—it’s productivity. And productivity is crushed by: — Red tape — Deficit spending — Union power — Regulatory capture

Just look at the U.S. ports. Unions fought automation for years. At West Coast ports, dockworker deals restricted tech upgrades—despite falling productivity and soaring costs. The U.S. doesn’t fail to build because of China. It fails because it doesn’t let builders build.

Meanwhile, China embraced automation. They’re not hiring armies of factory workers—they’re scaling robots. So even if reshoring succeeds, don’t expect jobs to come flooding back. Industrial policy doesn’t bring back the 1950s.

So what is the “Mar-a-Lago Agreement”? It’s an unofficial doctrine: 📌 Keep the dollar as the reserve currency 📌 Use tariffs to rebalance trade 📌 Force allies to absorb the cost 📌 Stimulate domestic supply chains with industrial policy All without touching the Fed or spending cuts.

It’s bold. It’s nationalist. It’s flawed. Because you can’t tariff your way to prosperity. And you can’t revive American industry without fixing what’s broken at home. The enemy isn’t foreign competition. It’s big government.

That’s what classical liberals have always warned: When the state manipulates markets, prints money, and micromanages trade… …it always ends up hurting the very economy it claims to protect. Tariffs won’t save America. But freedom, competition, and reform might.

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