Trump’s tariffs were supposed to boost the dollar. Why the opposite happened.
After Trump on Wednesday unveiled a raft of punishing “Liberation Day" tariffs, stock futures tumbled. The U.S. dollar whipsawed against major currencies. This highlights the confusion that has overtaken Wall Street regarding how to trade the U.S. currency. Most analysts have insisted that tariffs should push it up, reflecting how potential fewer purchases of overseas goods would narrow the trade deficit and mechanically reduce U.S. demand for foreign exchange. Also, U.S. growth is outpacing the eurozone’s, which has historically been dollar-positive. Yet this isn’t how it has played out so...