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This is going to be an online meetup using Zoom. If you've never used Zoom before, don't worry — it's easy to use and free to join.

Click on the link below as the scheduled date/time to log in...

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TRUMP'S TARIFFS, DE-DOLLARIZATION & THE MAR-A-LAGO ACCORD

INTRODUCTION:

In this meetup, we'll discuss the Trump administration's tariffs and how they've led to concerns that the U.S. dollar will lose its reserve currency status, and how this ties in with the theory behind Stephen Miran's proposed "Mar-a-Lago Accord". Instead of linking several short videos under each section, I'm just asking our members to watch this hour-long talk between The NY Times journalist Ezra Klein and the economist Kenneth Rogoff about his new book Our Dollar, Your Problem and how it sheds some light on these current debates:
https://www.youtube.com/watch?v=pT2cohNt6a4

* Note: You can also read the transcript of their discussion here - [https://www.nytimes.com/2025/05/02/opinion/ezra-klein-podcast-kenneth-rogoff.html](https://archive.ph/c2ftj)

Kenneth Rogoff earned his PhD in Economics from MIT, and he's taught economics at Princeton and Harvard. He's also served as an economist for the IMF and the Federal Reserve. He's the author of several previous books including This Time Is Different: Eight Centuries of Financial Folly (2009, co-authored with Carmen Reinhart) and The Curse of Cash (2016). Those who recall the financial crisis of 2007-8, may remember that Rogoff was an influential proponent of austerity policies, i.e. reducing government debt through spending cuts and tax increases, which conflicted with the fiscal stimulus policies favored by Keynesian economists like Paul Krugman.

Rogoff's latest book is subtitled "An Insider's View of Seven Turbulent Decades of Global Finance, and the Road Ahead" and thus it covers a lot of the post-WW2 history of the U.S. dollar's rise to world reserve currency status. While it was just published back in April, it was written before the 2024 election and thus Rogoff didn't yet know that Donald Trump would be re-elected and that his tariffs would be much more sweeping in his second term. However, he was already concerned that the dollar's dominance was slipping away.

We won't go into many of the historical issues his book discusses, focusing instead on current events. However, I figured I'd give you the publisher's blurb so you'd have a general sense of what Rogoff's book is about:
"Our Dollar, Your Problem argues that America’s currency might not have reached today’s lofty pinnacle without a certain amount of good luck. Drawing in part on his own experiences, including with policymakers and world leaders, Kenneth Rogoff animates the remarkable postwar run of the dollar—how it beat out the Japanese yen, the Soviet ruble, and the euro—and the challenges it faces today from crypto and the Chinese yuan, the end of reliably low inflation and interest rates, political instability, and the fracturing of the dollar bloc. Americans cannot take for granted that the Pax Dollar era will last indefinitely, not only because many countries are deeply frustrated with the system, but also because overconfidence and arrogance can lead to unforced errors. Rogoff shows how America’s outsized power and exorbitant privilege can spur financial instability—not just abroad but also at home."

In this first section of this meetup, we'll discuss the first 4 sections of Klein & Rogoff's discussion entitled "The basics of dollar dominance", "How the U.S. benefits", "Effects on U.S. manufacturing" and "International Perspectives" which goes from the opening to about 23:00.

In the second section, we'll discuss the next 2 sections of Klein & Rogoff's discussion entitled "Trump’s threats to the system" and "Tariffs and the dollar" which goes up to around 40:00.

In the third section, we'll discuss the final 3 sections of Klein & Rogoff's discussion entitled "Can the damage be un-done?", "Is a financial crisis on the horizon?" and "What could replace dollar dominance" which goes up to around 60:00.

RELEVANT MATERIAL FROM PAST MEETUPS:

We covered Trump's tariffs proposals in the 1st section of a meetup back in January entitled "Trump's Economic & Social Policies: Forecasting the Best & Worst Case Scenarios". We looked at the Economics 101 arguments for free trade and against tariffs, as well as Oren Cass's claim that this theory of free trade is too simplistic and overlooks certain exceptions like protecting certain strategic industries and stopping other nations from rising to a peer competitor. We also looked at Tyler Cowen's hope that Trump's tariffs could actually increase free trade if merely used as a bargaining method to get other nations to drop their tariffs, and we discussed Derek Scissors' fears that Trump's use of tariffs against Allies would fuel the rise of China by preventing "near-shoring" and "friend-shoring".

We covered the U.S. dollar's dominance in the 2nd section of a meetup back in March entitled "What Is/Was The 'Liberal International Order'?", along with several other aspects of the economic pillar of the LIO like "capitalist peace theory" (i.e. the correlation between free trade & peace), the "Washington consensus" (i.e. ten economic reforms promoted by the IMF & World Bank for developing nations) and the "Bretton Woods system" that lasted from 1944 to 1976 (i.e. Allied nations had fixed exchanges rates pegged to the U.S. dollar which was convertible to gold up until Nixon ended it prevent a gold run, paving the way for the flexible exchange rate system in place today).

Way back in Oct. 2018, midway through Trump's first term, we had a meetup entitled "Trade Deals & Trade Wars" where we discussed international trade from the perspective of the fields of economics, international relations, social psychology, and political science, and touched upon the possible effects of a US-China trade war.

DIRECTIONS ON HOW TO PREPARE FOR OUR DISCUSSION:

The videos & articles you see linked below are intended to give you a basic overview of some of the major debates over Trump's tariffs, the possibility of the dollar losing its reserve currency status, and the theory behind the Mar-a-Lago Accord. As usual, I certainly don't expect you to read all the articles prior to attending our discussion. The easiest way to prepare for our discussion is to just watch the hour-long video of the discussion between Ezra Klein & Kenneth Rogoff linked above. The articles marked with asterisks under each section are just there to supply additional details. You can browse and look at whichever ones you want, but don't worry - we'll cover the stuff you missed in our discussion.

In terms of the discussion format, my general idea is that we'll address the topics in the order presented here. I've listed some questions under each section to stimulate discussion. We'll do our best to address most of them, as well as whatever other questions our members raise. I figure we'll spend about 30 minutes on each section.

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I. THE BASICS OF DOLLAR DOMINANCE & ITS BENEFITS FOR THE U.S.:

II. TRUMP'S TARIFFS, THE MAR-A-LAGO ACCORD & THE CASE FOR DEVALUING THE U.S. DOLLAR:

  • Has USD dominance had some downsides in terms of making us "addicted" to debt and increased foreign investments in the US that can fuel market bubbles?
  • Does heavy use of USD worldwide makes the things Americans buy cheaper and the things we sell more expensive, thus leading to deindustrialization? Or is Rogoff right that decline of heavy industry was more tied to automation and (to a lesser extent) openness to trade with countries with cheaper labor?
  • Has illegal immigration in the US held labor prices down, so that we have not done as much automation and increased productivity as fast as we would have without it? If so, wouldn't that slow industrial outsourcing to countries with cheaper labor?
  • Has deindustrialization and the rise of the financial sector in the US led to a "soft, decadent economy" unlike the Chinese economy which is more based on industrial power?
  • Is it contradictory for the Trump administration to say the dollar should be weaker (to boost exports) and it should still be the world reserve currency - i.e. would that imply keeping the dollar strong?
  • Could Stephen Miran's proposed "Mar-a-Lago Accord" reduce the United States trade deficit, restore domestic manufacturing, and realign international economic relationships through the use of tariffs, currency and capital measures, and trade agreements tied to national security? Why does Rogoff think it would just push other countries to dump the USD and stop investing in the US?
  • EXTRA ARTICLES:
  • Kent Clark Forum (poll of top economists), "Tariffs, Reciprocal and Retaliatory"
    https://kentclarkcenter.org/surveys/tariffs-reciprocal-and-retaliatory-2/
  • Oren Cass, "America's Three Demands: On the importance of knowing what you want, and telling people"
    https://www.understandingamerica.co/p/americas-three-demands
  • Josh Lipsky & Jessie Yin, "Meeting in Mar-a-Lago: Is a new currency deal plausible?"
    https://www.atlanticcouncil.org/blogs/econographics/meeting-in-mar-a-lago-is-a-new-currency-deal-plausible/
  • Brad DeLong, "Oren Cass Pretends That Trump's Tariff Policies Have Something to Do with the Tariff Policies He Used to Advocate. Surprise! Surprise! They Do Not"
    https://braddelong.substack.com/p/oren-cass-pretends-that-trumps-tariff
  • Kenneth Rogoff, "Trump’s Misguided Plan to Weaken the Dollar [i.e. the Mar-a-Lago Accord]"
    [https://www.project-syndicate.org/commentary/trump-administration-mar-a-lago-plan-to-weaken-dollar-is-deeply-flawed-by-kenneth-rogoff-2025-05](https://archive.ph/KFlyU)

III. HOW U.S. TARIFFS, DE-DOLLARIZATION & RISING DEBT RAISE THE POSSIBILITY OF A FINANCIAL CRISIS IN THE NEAR FUTURE:

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