‘Hidden tax’ on Americans as US dollar drops 10% — why your money buys less and how to protect your portfolio

Moneywise and Yahoo Finance LLC whitethorn gain committee oregon gross done links successful the contented below.

The U.S. dollar has fallen astir 10% against large planetary currencies since Donald Trump returned to office, marking 1 of the steepest six-month declines successful implicit 50 years (1).

Economist and probe chap of the American Institute for Economic Research, Thomas Savidge, told ABC News, "It's benignant of a hidden tax. What your dollar is going to beryllium capable to bargain is going to shrink."

Top Picks

• Thanks to Jeff Bezos, you tin present go a landlord for arsenic small arsenic $100 — and no, you don't person to woody with tenants oregon hole freezers. Here's how

• Dave Ramsey warns astir 50% of Americans are making 1 large Social Security mistake — here’s however to hole it ASAP

• The IRS usually taxes golden arsenic a collectible — but this little-known strategy lets you clasp carnal bullion tax-free. Get your escaped usher from Priority Gold

It's nary astonishment that beingness is getting much costly successful America, and the impacts person already been felt successful meaningful ways crossed the country, from market bills to question costs.

A weaker dollar makes imports much expensive, which pushes up the prices of everything imported. Food, substance and truthful on. This compounds with affordability issues that've already been felt, specified arsenic the inflationary effects of rising lipid costs.

The greenback has fallen successful caller past arsenic well, with a "strange sell-off" that saw the U.S. dollar driblet by 9% astatine the opening of 2025 (2). The drops could beryllium peculiarly harmful to investors, particularly those whose assets are tied to the dollar's worth (3).

What a anemic dollar does astatine location and overseas

First and foremost, imported goods volition go much costly for American consumers and businesses. That volition straight lend to higher prices and inflation.

This could payment home products by making overseas imports little competitive, but it volition besides rise costs for consumers traveling overseas and for companies that trust connected earthy materials oregon components (4).

Additionally, for Americans traveling overseas, wealth won't agelong arsenic far. With the dollar down arsenic overmuch arsenic 10% to 17% against the Euro oregon the Swiss Franc, travelers successful those regions volition consciousness the pinch successful their wallets.

But the impacts don't halt astatine vacations.

Many mundane goods, similar coffee, volition emergence successful price. Coffee unsocial jumped astir 19% (5) implicit the past year, arsenic reported by ABC News, with currency fluctuations and proviso pressures contributing to the increase.

But for definite businesses, a anemic dollar tin person some benefits.

For larger multinational companies, overseas net go much invaluable erstwhile converted backmost into U.S. currency — companies similar Coca-Cola and Philip Morris person already pointed to "favorable currency" impacts (6).