Maintaining a strong dollar has been an article of faith in US economic policy for as long as I can remember. But all that may be about to change.

Already, Donald Trump has shattered post-war convention by imposing some of the highest tariffs since the notorious Smoot-Hawley Tariff Act of 1930.

Stephen Miran is in line to become the next head of the Federal Reserve and has been a supporter of a weaker US dollar.Credit: Bloomberg

It goes without saying that a weaker dollar furthers Trump’s protectionist goals by making imports more expensive and exports cheaper.

And now he’s alighted on just the man who might help bring that devaluation about – Stephen Miran, the chairman of the council of economic advisers.

Miran has been nominated by Trump for a soon-to-be-vacated seat on the Federal Reserve’s board of governors, and is therefore considered to be a prime candidate to replace Jerome Powell as chairman when the incumbent’s term ends in May next year – or possibly sooner, if Trump gets his way in forcing the incumbent’s early resignation.

There are lots of other names in the frame, so Miran cannot yet regard himself as a shoo-in for the job. But in some respects at least, he sings from the same hymn sheet as Trump, so he’s in with a decent chance.

Miran is a committed “devaluationist”, and once appointed head of the world’s most powerful monetary authority, could steer policy decisively in the direction of a weaker dollar.

Does it make any kind of sense? As on most other aspects of Trump’s economic agenda, the president’s “vision” for the dollar is a mass of contradictions and apparently incompatible goals.

He wants both a weaker dollar so as to make American goods more competitive and thereby reduce the trade deficit. But at the same time, he wants to preserve and enhance the dollar’s global reserve currency status, and its parallel position........

© The Sydney Morning Herald