many of America’s trading partners “peg” to the Dollar; depreciation has no direct effect if they hold the peg. Second, those that don’t peg are willing to take lower profits (hold Dollar prices steady) to keep market share (this has been the strategy of some exporters to the United States). Third, exports are a cost, imports a benefit, so trying to maximize a trade surplus is a net cost maximizing strategy (see Section 7.9). Fourth, it is not likely that many of those factory jobs will return to the United States.
Trump?
