I hadn’t seen this FT article when I wrote my post on this subject yesterday. Background:

A fresh trade war between the US and China over subsidies triggered a
sharp fall in the dollar on Friday after the Bush administration opened
the door for US companies to seek duties on imports from Chinese rivals.

Very nice. If 10-20% tariffs will be imposed on certain Chinese imports to the U.S., Americans will be paying more at the cash register. This is inflationary, meaning prices generally could go up as a result. U.S. assets could become more expensive, and there would be a decrease in the demand for dollars. One reason for a dollar drop.

No more ranting on this subject for me, at least not today. However, I will say that with the U.S. economy suffering under a weak (and getting weaker) housing market, no one needs this. As usual, trade protection means a few politically active folks will benefit and the rest of the economy will suffer. What’s worse, I can’t even blame the Republicans for this one - this is bipartisan folly.

And the manufacturing jobs won’t come back anyway . . .