CPA believes an overvalued dollar makes American goods and services less competitive in global markets. The Competitive Dollar for Jobs and Prosperity Act will create good jobs, rebalance trade and rebuild American prosperity.
Persistent U.S. dollar overvaluation fuels much of America’s global trade deficit by raising the price of U.S. goods and services in global markets. While the United States has an array of fiscal and monetary tools to manage its internal economy, it lacks effective exchange rate management tools to manage trade flows that have a powerful effect on the domestic economy.
For this reason, CPA advocates for The Competitive Dollar For Jobs And Prosperity Act, introduced by Senator Baldwin & Senator Hawley. This bill tasks the Federal Reserve with achieving and maintaining a current account balancing price for the dollar within five years.
A new Federal Reserve FEDS Note finds a systematic link between Chinese industrial policy interventions and export growth. The 15 most policy-targeted sectors accounted for 76% of the increase in China’s aggregate trade surplus from 2017 to 2024.
To reduce the deficit in a durable way, the United States must do more than tariff goods. It must tariff the money.
The Tax Foundation’s calculation simply assumes the approximate $132 billion in new 2025 tariff revenue is paid directly by households, dividing that figure across 134.8 million households to produce an average estimate of a $1,000 annual burden per household.
The November trade deficit numbers returned to a more normal figure, with the services surplus still in the $20s to low $30 billion range, and the goods deficit jumping from the October lull.
Once year-ending 2025 trade data is released in February, we will be looking at another $1 trillion deficit. Assuming the monthly goods deficit for November and December looks like the low October goods deficit of $58.5 billion, the U.S. will record a minimum $1.17 trillion goods gap for 2025, the second largest trade deficit since 2024’s $1.2 trillion barnstormer.
China’s trade surplus has crossed a dangerous threshold. In 2025, it exceeded $1 trillion for the first time, surpassing the previous record of $993 billion.
