The declining U.S. dollar is quietly pushing up prices for ordinary Americans—from vacation expenses to grocery bills. Since President Trump returned to the White House, the dollar has slid roughly 10% against major currencies, a shift that helps explain growing concerns about affordability.
The U.S. Dollar Index, which measures the greenback against a basket of other currencies, suffered its steepest six-month fall in over 50 years during the first half of 2025. The pace of decline has slowed since, but the index still sits about 10% below its level at the start of Trump’s term. A strong dollar tends to make imports cheaper and dampen inflation; when the dollar weakens, foreign-made goods and inputs can become more expensive while American exports become more competitively priced abroad.
The president has openly expressed support for a softer dollar, arguing it helps U.S. industry. Corporate leaders have likewise noticed benefits: big multinationals report favorable impacts from currency moves, with companies such as Philip Morris and Coca-Cola, and several hotel groups, saying a lower dollar boosted reported overseas revenue. InterContinental Hotels’ CEO pointed to the currency shift as a helpful factor as the company posted stronger results.
Those gains, however, are uneven. Many American firms sell mainly at home and rely on imported materials; they can be squeezed when the dollar weakens. Travis Madeira, a fourth-generation lobsterman and cofounder of LobsterBoys, says about 80% of his customers are in the U.S. He is paying more for imported bait and for Canadian lobsters, and he sees exporting competitors gaining an edge as the dollar falls.
Smaller companies are often less able to blunt currency swings than large multinationals that can hedge or redirect sales overseas. David Navazio, CEO of Gentell, which makes medical supplies at plants in Brazil, Paraguay, Canada, New Zealand and the U.K., says the weaker dollar raised costs across those operations. Gentell has had to lift some prices to account for currency moves on top of tariffs and higher fuel bills—extra costs that flow through to consumers.
The currency shift is most visible for travelers and anyone buying directly from foreign sellers. The dollar is roughly 16% weaker against the Mexican peso than it was in early 2025. Comparable drops—around 10% to 17%—have been recorded versus the euro, Swiss franc, Danish krone, Swedish krona and South African rand.
Macroeconomists estimate that in advanced economies like the U.S., only a fraction of an exchange-rate change—typically 5%–10% of a depreciation—shows up in consumer prices. But even a partial pass-through can add to broader inflationary pressures. Coffee illustrates the transmission: as the dollar weakened about 13% against Brazil’s real, some of that movement fed into U.S. retail prices; coffee is nearly 19% more expensive in the U.S. than a year ago.
Currency values fluctuate over time; the dollar has risen and fallen across different administrations since the Dollar Index began in 1973. Harvard economist Kenneth Rogoff, a former IMF chief economist, says many policy choices associated with the current administration weigh on the dollar, but he also argues the decline was likely after roughly a 15-year dollar rally. Rogoff warns the dollar could fall another 15% over the next five to six years, a change that would tend to lift commodity prices, particularly given geopolitical risks such as the Iran war’s impact on energy costs.
In short, a weaker dollar boosts reported overseas revenues for global corporations and helps exporters, but it raises costs for companies that depend on imports, small businesses and everyday consumers. The effect is showing up in higher travel spending, pricier groceries and more expensive routine purchases.