It was just three years ago the US, under then president Barack Obama, was warning the G20 about the risks of currency manipulation. On Friday, US President Donald Trump criticised the US Federal Reserve for raising interest rates because it would take away the US’ “big competitive edge.” In other words, Trump is campaigning for a weaker dollar.

Trump isn’t wrong in his assessment that currencies are being driven lower. With a trade war now in effect, countries are looking at ways of combating tariffs on their exports. Reducing interest rates and devaluating currencies will have the effect of mitigating tariffs by making their exports cheaper, but in the long run this will only stoke inflation and hurt companies. For those of us using the US dollar, the effects will be wide-ranging, from equity markets to oil prices to remittances. But the consequences will not stop governments faced with 25 per cent tariffs. China is letting the yuan fall to levels not seen since the beginning of 2017, and many analysts are expecting China will let it fall to 7.2 yuan to the dollar. The euro too is weak and has been since the implantation of negative interest rates in 2014.

The US is unlikely to follow suit, as the US Federal Reserve is relatively shielded from the day-to-day effects of US politics, but that Trump is actively pressuring the Fed to hold off on raising rates shows his intentions are to use every trick at his disposal to put “America First.” But any finger pointing is misplaced. The global fall in trade was a result of the Great Recession and the desire to protect jobs and economies is natural. But countries should not be putting up walls to protect themselves; instead they should be opening up to greater trade and growth. The International Monetary Fund and World Bank have said that the best way to grow an economy is through expanding trade.Tariffs are meant to prohibit trade; not boast it. Christine Lagarde, managing director of the IMF, warned the G20 that existing trade restrictions would reduce global output by 0.5 per cent. Had the US, China and the EU sat down to discuss boosting trade instead of threatening tariffs, currency manipulation wouldn’t be a issue. If the global community wants to restore growth and make the trade war and currency manipulation a thing of the past, then it needs to encourage a return to the World Trade Organisation and find healthy ways of airing their grievances.