trade war or bargaining chip?
Trump’s tariff threats are a bargaining chip to address the issue of the US dollar being overvalued relative to other major currencies, which has been causing trade imbalances, he stressed.
Varoufakis added that Trump may attempt to do something similar to the Plaza Accord of 1985 involving major economic powers, primarily the US and Japan, along with France, West Germany (as it then was), and the United Kingdom. This was an agreement to depreciate the US dollar relative to the Japanese yen and the German Deutsche Mark through coordinated foreign exchange market interventions.
The accord aimed to reduce the US trade deficit and stimulate US exports by making US goods more competitive in international markets.
Such an accord will lead to the “complete Japanification” of European economies, Varoufakis said. “Think of what happened after the Plaza Accord in Japan. You are going to have a very serious private debt crisis, a crisis in real estate. Already we have overvalued real estate across Europe and a slumping industry. It will have detrimental effects on the prospects of the middle class across the European Union.”
https://greekreporter.com/2025/01/21/yanis-varoufakis-trump-tariffs-dollar-greek-bubble/