For many Americans worried about rising prices, one of the biggest pressures on household budgets may not be immediately obvious. Beyond grocery aisles and holiday bookings, the declining value of the US dollar is quietly making everyday life more expensive. Since Donald Trump’s return to the White House as the president, dollar has dropped around 10% against other major global currencies, shrinking its purchasing power and adding new pressure to already stretched consumers.“It’s kind of a hidden tax,” says economist Thomas Savidge of the conservative-leaning American Institute for Economic Research. “What your dollar is going to be able to buy is going to shrink.”The scale of the decline has been historic. In the first half of 2025, the US Dollar Index, which tracks the greenback against major currencies, recorded its sharpest six-month fall in more than five decades. Although the slide has since steadied, the dollar remains roughly 10% below where it stood at the beginning of Trump’s term.A weaker dollar can make American exports more competitive abroad, but for consumers at home, it often means imported goods cost more. From foreign holidays to products sourced overseas, the same dollar now buys less.Trump has openly argued that a weaker currency benefits American industry, saying last year, “You make a hell of a lot more money with a weaker dollar,” reflecting his long-held belief that a strong dollar can put the US at a disadvantage.
Big corporations have ‘little bit of lever’
Large multinational firms have been among those benefiting from the currency shift. Companies including Philip Morris and Coca-Cola have cited “favorable currency impact” in earnings calls, as overseas sales become more profitable when foreign earnings are converted back into dollars.“In many cases, we’ve got a weaker dollar, which is not unhelpful,” Elie Maalouf, the CEO of InterContinental Hotels, said on a February call as the company announced higher profits and revenues.But for smaller businesses and firms focused mainly on domestic customers, the impact can be far less positive.Travis Madeira, a fourth-generation lobsterman and co-founder of LobsterBoys, says the weaker dollar is pushing up his costs because he imports bait and buys Canadian lobsters, while most of his customers are American.“The exporters are gonna have the advantage when it comes to the dollar weakening,” says Madeira. “These guys are gonna have a little bit of a lever on us.”For businesses like Gentell, a Pennsylvania-based medical supply company operating internationally, the falling dollar is also increasing expenses across overseas operations.“A year ago, none of these were concerns,” says CEO David Navazio. “And it always hurts the consumer.”For travellers, the impact is immediate. Americans visiting Mexico now find their dollar about 16% weaker against the peso than it was earlier in 2025. Similar declines have been seen against the euro and several other currencies, making overseas trips notably pricier.
Price hikes hit household budget
At home, imported products are also facing upward price pressure. Coffee is one example. Brazil, America’s largest coffee supplier, has seen its currency strengthen against the dollar, adding to cost pressures. US coffee prices have surged nearly 19% over the past year, according to government figures.While economists estimate that only a portion of currency declines directly reaches consumers in advanced economies like the US, even modest increases can compound broader inflation pressures.Harvard economist Kenneth Rogoff believes the dollar may have been due for a correction regardless of who occupied the White House, after a lengthy period of strength.“The dollar had been on a 15-year bull run,” he told AP. “I would argue the dollar is still wildly overvalued, and over the next maybe five or six years, it might fall 15%.”For consumers, that could mean continued pressure on essentials, especially commodities and fuel.“They’re just going to go up,” he says, “no matter what the dollar’s at.”
