America’s Secret Plan to Impact the Dollar | Mar-a-Lago Accord Explained

TradingKey - A recession is looming, America is frantically searching for ways to protect their dominance, all while 1 proposal is gaining a quiet traction. Its goal? To weaken the US dollar, counter China's growing influence, and restore domestic manufacturing. What exactly is the Mar-a-Lago Accord proposal? How will it impact the US dollar and US stocks? Follow Tradingkey analyst Petar Petrov to explore together!

The full text of the script is as follows:

My name is Petar, and I’m a senior analyst at TradingKey. In this video, we will explore what exactly the Mar-a-Lago Accord is, how it might work, and what it could be for the markets. Before we get into the mechanics, let’s take a step back to understand the backdrop.

What the Mar-a-Lago Accord actually propose?

The Mar-a-Lago proposal takes inspiration from the 1985 Plaza Accord, a historic agreement between the US, Western Europe and Japan, to weaken the US dollar in order to address trade imbalances. The coordinated devaluation successfully boosted US exports and shifted the global economic order in America's favor. The Mar-a-Lago version, however, seems far more unilateral. This idea was first outlined in November 2024 by Stephen Miran, who now serves as the Chairman of Trump’s Council of Economic Advisors. While Trump has not publicly endorsed this policy, some of his past trade positions suggest a high likelihood of alignment with this direction.

At its core, the proposal serves to depreciate the US dollar, restore domestic manufacturing, and address America’s debt. This revolves around several key policy tools. Tariffs seem to be the cornerstone of the strategy. By applying pressure on foreign counterparts to appreciate their currencies, encouraging manufacturers to relocate production back to America, and generating tariff revenue, tariffs may provide fiscal space for tax cuts. 

The accord also outlines a debt management component. This includes converting existing US Treasuries into long-term “bullet” bonds of potentially 100 years in maturity. This move may allow the government to delay interest payments and reduce immediate fiscal strain.

 Another element involves soliciting US allies to fund more of their own defense. By reducing America’s defense spending abroad, more resources could be redirected toward domestic economic programs. Ultimately, the plan proposes the creation of a US-controlled sovereign wealth fund. This fund would intervene in forex markets by buying foreign currencies, a tactic designed to weaken the dollar by direct market intervention.

What’s the impact on the U.S. dollar, stock markets, and Treasury yields?

The desired result of the accord would be downward pressure on the US dollar. A weaker dollar would make American exports much more competitive abroad thereby increasing demand for US exports, and by extension, global usage of the dollar. In parallel, US Treasury yields could also fall. From a market perspective, major US stock indices like the S&P 500 and Nasdaq may remain resilient. Large-cap tech firms could continue to perform well, especially if AI tailwinds persist. 

The manufacturing, banking, and energy industries likely stem to benefit from these structural shifts. Many small and mid-cap industries are already operating domestically within the US, which means they wouldn’t face the same relocation costs as their multinational counterparts. As a result, they may be early beneficiaries of manufacturing incentives and capital inflows. Plus, a shift toward domestic industrial investment would also likely increase demand for capital. 

This could benefit banks through increased issuance of equity and debt instruments. Moreover, reindustrialization would require a reliable and large-scale energy supply. This could create upside for companies in oil, gas, electricity, and even renewables. With all these said, the main question remains. Is the Mar-a-Lago Accord feasible?

What are the challenges and hurdles to the implementation of the Mar-a-Lago Accord?

In today’s global context, US influence may not be strong enough to compel cooperation. China and other BRICS nations are increasingly assertive in shaping their own way of economic order. Any US attempt to isolate them economically could face resistance. Even if countries wanted to adjust their exchange rates, today’s financial markets are far more complex and liquid than they were back in the 1980s. Central banks may lack the tools necessary to influence currency values in a sustained way. Additionally, reviving US manufacturing would be a major challenge. Labor shortages and high wage expectations mean that Americans may not be willing to take up industrial jobs. Moreover, the upfront investment needed to rebuild factories domestically would be substantial. This could put pressure on the very debt burden the policy aims to reduce. Ultimately, only a small portion of debt is held by foreign governments. The challenge lies in persuading private investors to restructure Washington’s debt, who may not accept lower interest payments without demanding a higher risk premium. So, where does that leave everyday investors?

The Mar-a-Lago Accord is a hypothetical strategy and not an official policy. But it reflects a growing line of thinking among certain US policy circles: the weaker dollar, trade protectionism, and debt restructuring could form the foundation of a new economic model. Will this ever become a reality? It’s hard to say, but the debate it sparks may shape the next chapter in global economic policy, whether it’s through direct action or the anticipation of it. If you found this breakdown helpful, don’t forget to hit the like button and subscribe to our channel. Remember to stay informed and stay ahead by following us, link to all our socials is in the description. See you in the next one!