'Disastrous consequences': Columnist warns this 'destructive' Trump plan could tank economy

Former President Donald Trump is rolling out a new economic plank of his policy platform should he win another term in the White House, and one columnist is warning it could have devastating impacts.

According to Politico, Trump's 2024 campaign is mulling the rollout of a proposal to devalue the US dollar. Robert Lighthizer, who was trade advisor to the former president in his first term, has been reportedly chewing on the idea of currency devaluation — by convincing other countries to change their own currency valuation — as a means of ramping up the American export sector in the European and Pacific markets.

"Currency revaluation is likely to be a priority for some members of a potential second Trump administration, mainly because of the viewpoint that [an overvalued dollar] contributes to the trade deficit," an unnamed former Trump official told Politico earlier this week.

READ MORE: Expect an 'erratic path for policy' under second Trump presidency: expert

However, should Trump pursue currency devaluation, Washington Post columnist Catherine Rampell argues that it would have far-reaching effects on both the American and global economies. In a Tuesday column, Rampell warned that a devalued U.S. dollar would exacerbate inflation and lead to higher prices for American consumers.

"This might well be Trump’s most inflationary and economically destructive idea yet," Rampell wrote. "[M]aybe this could help some U.S. companies trying to sell products abroad. That is, until you consider everything else that might happen if we deliberately tried to weaken our currency, which would open a Pandora’s shipping container of disastrous consequences."

Rampell wrote that because the details on Trump's proposed currency devaluation plan are still scarce, there are a number of ways that he could pursue that policy. His administration could force the Federal Reserve to cut interest rates, pressure other countries to change theirs, or increase taxes on foreign money flowing into the U.S. She warned that while any of these policies could potentially trigger a global recession, the primary byproduct would be Americans getting gouged at the cash register.

"Americans buy a lot of imported goods, from fruit to toys to cars to home furnishings. Those would all get more expensive as the purchasing power of the dollar fell," she argued.

READ MORE: 'That is the question': Trump ally admits campaign not sure how to attack Biden on economy

And because the dollar is the primary reserve currency around the world, devaluing it could impact everything from debt service to global financial markets. Should the dollar be seen as less valuable, another reserve currency could take its place, which would mean that taxes would go up on working-class Americans and additional spending cuts would be imposed on public services Americans depend on.

"We have a stable government that has reliably paid its bills and doesn’t do dodgy things to deliberately manipulate the value of its fiat currency. As a result, the dollar is widely used in international trade and dollar-denominated U.S. government debt is in high demand," she wrote. "Eroding the dollar’s global use might make it more expensive for the U.S. government to keep borrowing so much."

As the world's reserve currency, dollars are often used for global international transactions between foreign governments. Rampell wrly observed that devaluing the dollar would notably make it more difficult for the U.S. government to impose sanctions on its adversaries, like Russia.

"Then again, maybe we should give Trump some credit. Reducing our global influence, and specifically our ability to punish certain global villains, might be exactly what he wants," she wrote.

READ MORE: 'I would be bragging about it too': Trump economic adviser admits Biden economy is 'good'

Click here to read Rampell's column in full (subscription required).