It’s a Delay.

There’s a growing sentiment in markets that a weaker U.S. dollar may be a net positive — boosting exports, easing debt burdens, and rebalancing trade. On paper, that logic holds. In practice, it’s far more conditional than current optimism suggests.

Currency devaluation can make exports more competitive, but only if an economy has surplus productive capacity and resilient supply chains. The United States does not export low-cost, high-volume manufactured goods at scale; it exports high-value goods and services that rely heavily on imported inputs. A weaker dollar raises those input costs, blunting the competitive benefit.

The same tension applies to trade deficits. Devaluation theoretically reduces imports and encourages domestic substitution. But tariffs have already pushed import prices higher, and domestic alternatives often don’t exist at scale. The result isn’t substitution — it’s inflation. Consumers absorb the cost, not foreign producers.

Debt dynamics are often cited as the strongest argument for devaluation. Yes, inflation and currency weakness can reduce the real burden of fixed-rate debt. But the U.S. is rolling over enormous volumes of short-term debt at higher rates. Persistent devaluation risks higher risk premiums, offsetting the benefit and testing investor confidence.

The most underappreciated cost is productivity. A weaker currency makes imported capital goods — advanced machinery, energy systems, precision components — more expensive. Firms delay investment. Productivity slows. And productivity, not inflation, is the only sustainable path out of high debt.

This contrast becomes clearer when viewed globally. China is pairing currency management with aggressive investment in automation, AI, and domestic industrial efficiency. Devaluation is instrumental — used to support structural transformation.

The United States, by contrast, is using currency weakness as a pressure valve. It buys time. It does not buy reform. In which we are in dreadful need of.

Currency devaluation is not a growth strategy. It is a bridge — and bridges only matter if you know where they lead.

Markets may be comfortable for now. History suggests that comfort becomes fragile when delay is mistaken for direction.