Summary of an article by Kliment Robev
In brief
Kliment Robev argues that behind the seemingly chaotic first 100 days of Donald Trump’s second term lies a consistent logic: the United States is being run like a struggling corporation with heavy debts. In his view the key to the plan is a cheaper dollar, and the route to it runs through pressure on the Federal Reserve for lower rates.
Key points
- Three priorities: lower government spending (more than 200,000 federal employees already cut), higher revenue — from tariffs in the short term and reindustrialisation in the long term — and lower interest rates.
- He expects a softer tone and deals on tariffs, but tariffs will stay and will redistribute capital and market share. World trade will fragment into blocs, and the most flexible countries and companies will gain over the long run.
- After US GDP fell in the first quarter, a second negative quarter would mean a technical recession as early as July — a tool for even stronger pressure on the Federal Reserve.
- Faster rate cuts usually weaken the dollar. A cheap dollar is the “missing piece”: it makes US goods more affordable abroad, neutralises any counter-tariffs and supports reindustrialisation.
- Without a cheap dollar, Robev concludes, Trump’s strategy is bound to fail.
Context
Published on 12 May 2025, about a month after the sweeping tariffs announced on 2 April and after data showing US GDP contracted in the first quarter of 2025.
Views reflect his position at the date of publication and are not investment advice. Regulatory information
