How the weaker US dollar is affecting everyday expenses
The declining US dollar is increasing costs for travel, imported goods and groceries, while benefiting some multinational companies and exporters. Economists warn that continued weakness in the currency could add pressure on American consumers already facing inflation and rising commodity prices
New York: A hidden force is quietly pushing up costs for everything from your summer vacation to your weekly grocery bills: a weaker US dollar.
The dollar has fallen about 10 per cent against other major currencies since President Donald Trump returned to the White House, a pullback that is potentially playing a role in Americans’ concerns about affordability.
“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.”
A look at where the dollar stands and what it means for you:
Historic dollar decline
The US Dollar Index, which measures the greenback against other major currencies, logged its steepest six-month drop in more than 50 years in the first half of 2025. Though the decline hasn’t deepened, the dollar index is still about 10 per cent lower than at the start of Trump’s term.
A strong dollar makes imports cheaper and can help keep inflation in check. A weak one can increase prices of foreign goods but boost American exports.
US presidents have long voiced support for a strong dollar even as they pursued policies that, at times, pushed the currency lower. Trump has suggested a strong dollar puts the US at a disadvantage and that a weak dollar helps American industry. And as with most things involving Trump, he has been blunter in his messaging.
“You make a hell of a lot more money with a weaker dollar,” he said last year, one of a number of public statements showing his preference for seeing the dollar decline.
Big multinationals benefit
Trump isn’t alone in seeing the benefits of a weaker buck.
In recent months, corporate earnings calls have been peppered with talk of how a weaker dollar has helped companies from Philip Morris to Coca-Cola, with executives using C-suite phrases like “favourable currency impact” to note how the dip brought tailwinds outside the US that added to bottom lines.
“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.
For big multinational companies that do business overseas, a weaker dollar can spur sales for products that suddenly become cheaper. But the vast majority of US businesses are not operating beyond the border. For those catering to domestic customers, it is a different story, particularly if they are reliant on imported goods.
Travis Madeira, a fourth-generation lobsterman who founded the lobster-shipping business LobsterBoys with his brother, makes about 80 per cent of his sales to Americans, unlike some competitors who primarily export.
“The exporters are gonna have the advantage when it comes to the dollar weakening,” says Madeira, who is paying more to import bait and buy Canadian lobsters. “These guys are gonna have a little bit of a lever on us.”
Smaller companies hurt
Even among companies that do have a presence outside the US, the dollar’s fall can have an impact. While many big companies hedge currency to try to insulate themselves or push more sales overseas, smaller businesses are often more susceptible to the turbulence.
David Navazio, CEO of Pennsylvania-based Gentell, which makes bandages and other medical supplies, operates plants in Brazil, Paraguay, Canada, New Zealand and the United Kingdom. In each location, the dollar has fallen, increasing Gentell’s costs.
Gentell has had to raise some prices to reflect the currency fluctuation, which adds to other challenges, including tariffs and war-related spikes in fuel costs.
“A year ago, none of these were concerns,” he says. “And it always hurts the consumer.”
Other currencies rise
For the American consumer, the reality of a declining dollar is most obvious during foreign travel or when making a purchase directly from an international seller.
Cross the border into Mexico, the top foreign destination for Americans, and your dollar is about 16 per cent weaker against the peso compared with early 2025. Declines of about 10 per cent to 17 per cent have been recorded elsewhere, including against the Swiss franc, South African rand, Danish krone, Swedish krona and the euro.
As for goods imported into the US, there is an impact, but it is harder to gauge. Many economists estimate that, in advanced countries like the US, only about 5 per cent to 10 per cent of a currency dip is passed on to consumers.
But they are an added stress when prices are already affected by other factors.
Take coffee, one of the grocery items that has seen the biggest price hike in the past year. Brazil is the biggest source of coffee for the US, and the dollar has fallen around 13 per cent against the real. Currency fluctuations can hit harder in developing economies and, while only a fraction of the change may feed into coffee’s ballooning price, every bit can add up. Coffee prices are up nearly 19 per cent in the US in the past year, according to government data.
Expect more movement
Currency values are constantly moving and, while the dollar’s recent fall is notable, it has reached lower levels at points during the presidencies of each of Trump’s predecessors, dating back to the creation of the Dollar Index in 1973, when Richard Nixon was president.
Kenneth Rogoff, a Harvard University economist and former chief economist at the International Monetary Fund, says while “a lot of policies that Trump is pursuing are something of a cancer for the dollar,” he believes it was destined to fall no matter who was in charge.
“The dollar had been on a 15-year bull run,” he said. “I would argue the dollar is still wildly overvalued, and over the next maybe five or six years, it might fall 15 per cent.”
What does that mean for American consumers? Rogoff says commodity prices are likely to rise, particularly with the impact of the Iran war on fuel prices.
“They’re just going to go up,” he says, “no matter what the dollar’s at.”
