The greenback has dropped over 10% in 2025, amid US President Donald Trump’s tariffs and rising deficits
The US dollar has fallen more than 10% against major currencies in the first half of 2025, marking its worst start to a year since 1973, the New York Times reported on Monday, citing trading data. The decline is being attributed to US President Donald Trump’s trade policies and concerns over increasing fiscal deficits.
The ICE US Dollar Index, which measures the dollar against a basket of major currencies, has dropped 10.8% year-to-date. The downturn recorded in the past six months contrasts with the dollar’s traditional role as a safe-haven asset, the report said.
The last time the dollar saw a comparable drop at the start of a year was in 1973, following the end of its link to gold. This time, the shift stems from Trump’s push to reshape the global order through aggressive tariffs and a more isolationist foreign policy, according to the outlet.
Since returning to office in January, Trump has imposed sweeping tariffs aimed at protecting domestic manufacturing. The campaign culminated on April 2 with “Liberation Day” measures, including a blanket 10% levy on all imports and steeper rates for goods from China, Mexico, Canada, and EU member states.
Some of the duties have since been paused to allow time for negotiations. Trump has defended the strategy as a means to reshore jobs to the US and reduce the country’s trade deficit.
However, his aggressive tariff policies have unsettled markets, the outlet noted. Trump’s trade proposals, concerns about inflation, and growing government debt have put pressure on the dollar, while fading confidence in the United States’ role in the global financial system has added to the decline.
“Having a weak dollar or a strong dollar isn’t the issue,” Steve Englander, global head of G10 foreign exchange research at Standard Chartered told the NYT. “The issue is: What is it telling you about how the world sees your policies?”
Analysts have cautioned that the dollar’s continued fall could carry global consequences. Some market observers believe the sharp drop in the greenback has raised doubts about its status as the world’s primary reserve currency.
Adding to investor unease, the Senate recently approved a Republican-backed tax-and-spending bill projected to increase the federal deficit by $3.3 trillion.
