Double Whammy: How a Weakened Dollar and Rising Tariffs Are Squeezing Americans

It’s not just tariffs tightening household budgets, a weakened dollar is quietly driving up the cost of everyday goods, one grocery trip at a time.

Holly Springs, NC, Jul. 11, 2025 — While headlines focus on tariffs and trade tensions, there’s another force quietly making life more expensive for American families: the weakening U.S. dollar.

Since the start of the year, the value of the dollar has dropped more than 10% against a basket of major global currencies. That might sound like an abstract data point for Wall Street economists, but it has very real consequences for the rest of us. A weaker dollar means our money doesn’t go as far, especially when it comes to the things we buy from abroad.

That’s where the double whammy hits.

The current administration’s push for expanded tariffs, essentially taxes on imported goods, is coming at the same time the dollar is losing strength. Tariffs were already making imports more expensive. Now, add a weaker dollar to the equation, and prices climb even higher.

So why is the dollar falling in the first place? The decline reflects a growing sense of economic uncertainty. With the Federal Reserve signaling potential interest rate cuts and markets questioning the long-term impact of trade protectionism, investors are pulling back from the dollar. On top of that, global efforts to reduce dependence on the U.S. currency, especially among BRICS countries and European partners, are further eroding its strength. The result is a perfect storm of reduced confidence, lower yield appeal, and geopolitical fragmentation that pushes the dollar downward.

Take electronics, cars, or even groceries. Many of these goods, or the parts and materials that make them, come from overseas. With the dollar down and tariffs layered on top, businesses pay more, and you can bet those costs get passed on to consumers. The result? Higher prices on store shelves, at the pump, and in your utility bills.

For average Americans, it feels like inflation that just won’t quit. And while policymakers point to improving export numbers and a “buy American” boost for manufacturers, the reality for most families is simpler: paychecks don’t stretch as far.

This isn't just a pocketbook issue. A prolonged weak dollar makes foreign travel more expensive, discourages investment in U.S. assets, and potentially fuels even more inflation, which could force the Federal Reserve to keep interest rates high. That means higher mortgage payments, steeper credit card debt, and fewer dollars to save or spend.

To be clear, protecting American industries from unfair trade practices is a worthy goal. But doing so with blanket tariffs while the dollar is already falling creates unnecessary pressure on consumers and small businesses alike. It’s one thing to support American manufacturing. It’s another to ask working families to foot the bill twice.

There’s nothing wrong with aiming to level the playing field. But we can’t ignore the basic arithmetic. When the dollar weakens and tariffs rise, Americans pay more. That’s not a theory. That’s a receipt.

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Disclaimer: The views and opinions expressed in this article are those of the author, Christian A. Hendricks, and do not necessarily reflect the official policy or position of Holly Springs Update.