The U.S. dollar has tumbled about 10% against a basket of major currencies since the start of President Donald Trump’s term, a pullback that is quietly raising costs for American households on everything from imported groceries to international travel, according to an Associated Press analysis published Sunday. The U.S. Dollar Index recorded its steepest six-month decline in more than 50 years during the first half of 2025, and while the slide has leveled off, the weaker exchange rate is adding to the inflationary pressures already weighing on consumers.
Economist Thomas Savidge of the American Institute for Economic Research called the depreciation a “hidden tax,” warning that “what your dollar is going to be able to buy is going to shrink.” A strong dollar typically makes imports cheaper and helps contain inflation, while a weak dollar can do the opposite, though it also makes American exports more competitive abroad.
Trump has broken with the long-standing presidential preference for a strong currency, bluntly stating that a weaker dollar helps U.S. industry. “You make a hell of a lot more money with a weaker dollar,” the AP quoted him saying last year.
Large multinational corporations are already seeing benefits. Executives from Coca-Cola, Philip Morris, and InterContinental Hotels have used phrases such as “favorable currency impact” on recent earnings calls to describe how the weaker dollar lifted revenues outside the United States. “In many cases, we’ve got a weaker dollar, which is not unhelpful,” Elie Maalouf, CEO of InterContinental Hotels, said on a February call as the company reported higher profits.
For small and medium-sized businesses focused on the domestic market, however, the weaker dollar is a burden. Travis Madeira, a fourth-generation lobsterman who co-founded LobsterBoys, said about 80% of his sales are to American customers, while his costs for imported bait and Canadian lobsters have climbed. “These guys are gonna have a little bit of a lever on us,” Madeira said, referring to competitors who primarily export.
David Navazio, CEO of Pennsylvania-based medical-supply manufacturer Gentell, operates plants in Brazil, Paraguay, Canada, New Zealand, and the United Kingdom. In every one of those countries, the dollar has declined, raising Gentell’s costs and forcing price increases. “A year ago, none of these were concerns,” Navazio said. “And it always hurts the consumer.”
For American travelers, the weaker dollar is immediately visible. The dollar is about 16% weaker against the Mexican peso compared with the beginning of 2025, and similar declines of 10% to 17% have been recorded against the Swiss franc, South African rand, Danish krone, Swedish krona, and the Euro.
On the grocery shelf, higher import costs feed through more gradually. Many economists estimate that only 5% to 10% of a currency dip is passed on to consumers in advanced economies such as the U.S., but the effects add up when prices are already elevated by other forces. Coffee, for instance, has become a stark example. Brazil is the largest U.S. coffee supplier and the dollar has dropped roughly 13% against the Brazilian real, contributing to a nearly 19% rise in U.S. coffee prices over the past year, according to government data.
The dollar has reached lower levels at points under each of Trump’s predecessors since the Dollar Index was created in 1973. Harvard economist Kenneth Rogoff, a former chief economist at the International Monetary Fund, said the dollar was likely to fall regardless of who occupies the White House, calling the currency “still wildly overvalued.” Rogoff predicted the dollar could depreciate an additional 15% over the next five to six years, and stressed that commodity prices, particularly fuel, are likely to keep climbing because of the Iran war’s impact on energy markets.
“They’re just going to go up,” Rogoff said, “no matter what the dollar’s at.”