Dollar Climbs Off Multi-Year Lows As Report Unpacks Bessent’s Influence On Trump Tariff Timeline

The U.S. dollar has shown some strength in recent sessions, as the threat of President Donald Trump’s “reciprocal tariffs” has been averted, at least for now. 

While the president signaled in his executive order regarding tariff deadline extension that the delay was due to recommendations from senior officials, it has now emerged that Treasury Secretary Scott Bessent was primarily behind the pushed-out timeline.

The U.S. Dollar Index, which measures the value of the greenback against a basket of currencies belonging to Washington’s major trading partners, was up marginally at 97.57 at last check.

The index hit a low of 96.38 on July 1, its lowest level since February 2022, but has since reversed course. It, however, trades off the 110+ level seen in mid-January before Trump’s inauguration.

The Invesco DB US Dollar Index Bullish Fund (UUP), an exchange-traded fund (ETF) that tracks the performance of the Deutsche Bank Long US Dollar Index (USDX) Futures Index, has gained over 1% since it hit a 52-week low of $26.81 on July 1. 

The modest recovery comes as traders express relief over the risk of a near-term recession dropping. Economists had flagged a potential domestic downturn, accompanied by a rise in inflationary pressures, if the president were to implement his tariff proposals fully.

The SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETFs) that tracks the S&P 500 Index, has seen some volatility amid the uncertainty over Trump tariffs. The ETF has shed about 0.80% this week, although it trades just shy off its all-time high.

Flagging Bessent’s potential role in averting a crisis, a Wall Street Journal, citing people familiar with the matter, said, advisers led by the Treasury Secretary convinced the president that more deals could be done with additional time. 

The Journal reported that Trump made several phone calls and discussed the looming deadline with allies from his private golf club in Bedminster, N.J., regarding the impending expiration at 12:01 a.m. on Wednesday.

The president reportedly weighed in on options that included setting a new August deadline, sending out letters without specifying a date, and implementing new tariff rates. 

The report stated that Trump expressed his exasperation to allies and aides regarding the lack of progress in the bilateral deal talks. Fresh off his win with the “big, beautiful” tax bill and the U.S. bombing of Iranian nuclear facilities, the president wanted to add a tariff victory to those. 

As he veered toward sticking to his July 9 deadline, Bessent’s message that some key deals were nearing completion made him change his stance.

The Treasury Secretary was also reportedly instrumental in persuading Trump to agree to a 90-day pause in April, following the announcement of the “Liberation Day” tariffs. 

Trump, meanwhile, sent a batch of similarly worded letters to heads of state of 14 countries, which are Washington’s key trading partners. He has clarified that the August deadline will not be extended and that more letters will be sent out on Wednesday. 

He has also threatened to impose 50% tariffs on copper imports and 200% on pharmaceutical products.

The dollar, which has posted the steepest half-year decline in over 50 years, could regain its momentum if the tariff issue is resolved and the Trump administration can contain the country’s ballooning fiscal deficit.

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