The Mar-a-Lago Agreement: A New Economic Vision for the United States and the Future of the Dollar

The Mar-a-Lago Agreement is an economic project currently being developed by economists close to Donald Trump and external observers such as Zoltan Pozsar. Although it has yet to be officially recognized in history, the agreement draws inspiration from the Plaza Accord of 1985, aiming to restore a global economic balance that could mark a new chapter for the United States and its currency, the dollar.

The Dollar Crisis and Historical Context

In the 1980s, the dollar faced significant challenges, but the Federal Reserve, under Paul Volcker, took drastic measures by raising interest rates to fight inflation. This led to a significant appreciation of the dollar, which rose by 50% against European currencies and the Japanese yen in just a few years. While this benefited investments and financial markets, it caused major problems for American industry, leading to a growing trade deficit.

The Plaza Accord and Currency Rebalancing

In 1985, under President Ronald Reagan, the United States, Japan, and Europe signed the Plaza Accord, aimed at depreciating the dollar and rebalancing global economies. This agreement, which involved coordinated monetary policies to reduce the dollar’s value, resulted in a stronger yen and European currencies, but in 1987, further intervention was needed with the Louvre Accord to prevent an excessive drop in the dollar.

The End of American Deindustrialization?

In the 1990s, American industry underwent a process of deindustrialization, with production moving primarily to Asia. This shift lowered costs for American businesses and increased profits, but today, its consequences are evident: American industry has been severely weakened, especially in key sectors like defense.

Trump and the “Reindustrialization” Movement

In 2016, Donald Trump made “reindustrialization” a central theme, criticizing the deindustrialization of the country. In 2024, his proposal to revitalize American industry could include fiscal policies such as deregulation and corporate tax cuts. However, one of the key levers for achieving this goal would be the devaluation of the dollar, a process that could be initiated through tariffs.

Tariffs as an Economic Tool

The idea is that tariffs could be used to reduce the dollar’s value, thereby boosting American industrial competitiveness. Unlike dollar devaluation, which would not generate fiscal revenues, tariffs could be an effective way to raise government income, though their widespread implementation would require international negotiations. An alternative, as suggested by some economists, could be the introduction of taxes on foreign investments in the U.S., but this could negatively impact financial markets.

Economic Perspectives

Within this project, there are two main views. Economist Lighthizer advocates for permanent tariffs, while Scott Bessent sees them as a temporary tool to exert pressure on other countries and eventually reach a global agreement. In this context, the Mar-a-Lago Agreement could become the final step in realigning global economies, potentially leading to a new version of international economic balance.

The Balance Between the Dollar and the Global Economy

The proposal of a weaker dollar could revitalize American industry and markets, but independent economists warn that rebalancing the global economy would require radical changes in both Chinese and American consumption and production models. The challenge will be to maintain a balance between a strong dollar and sustainable growth without falling into excessive economic instability.

In conclusion, the Mar-a-Lago Agreement could become a decisive tool in global economic policy, aimed at rebalancing trade flows and promoting reindustrialization in the United States. However, its realization will depend on a complex set of variables and intense interactions between domestic politics and global dynamics.