<p>Most manufactured products are sold domestically, but even so a strong dollar will (usually) cause a decline in sales and profitability of US manufacturers. The reason for this is that a strong dollar makes foreign products relatively cheaper, not just manufactured products, but all products. Therefore it becomes cheaper for person to buy, say a foreign-made washing machine compared to an American-made washing machine.</p>

<p>What news articles like this don't mention is that a weak dollar hurts Americans because it makes everything they buy, like gasoline, more expensive, not just manufactured goods.</p>

<p>The exception to the rule is during wartime. For example, as a result of World War II the United States dollar became stronger AND manufacturing profitability increased at the same time. But this was because competitors in Europe had all their factories in ruins, which is not the case today obviously.</p>

CC BY-SA 3.0
2016-01-27T16:46:49.880Z
There are probably several exceptions to the rule. It just means that the exchange rate is not the only factor in manufacturers profitability.
Giskard
CC BY-SA 3.0
2016-01-27T21:58:04.953Z
Quality+preferences being another two...
ChinG
CC BY-SA 3.0
2016-01-27T16:24:27.113Z
2016-01-27T16:39:38.073Z
2016-01-27T16:39:38.073Z
Lassie Fair
<p>I am reading this article about the strengthening of the US Dollar when I came across this paragraph: </p>

<p>"But there are reasons to be cautious. A strong dollar will squeeze American manufacturers, which have otherwise benefited from falling energy prices and rising wages in China. That will weigh on growth in the United States and further suppress inflation, which is already well below the Fed’s target."</p>

<p>Am I understanding it correctly that because the Dollar is getting stronger that it will hurt American Manufacturers?</p>

<p>Source article: <a href="http://www.msn.com/en-us/money/markets/the-dollar-keeps-rising-for-good-or-evil/ar-BBoJUq2?li=BBnb7Kz&amp;ocid=iehp">http://www.msn.com/en-us/money/markets/the-dollar-keeps-rising-for-good-or-evil/ar-BBoJUq2?li=BBnb7Kz&amp;ocid=iehp</a></p>

<inflation><usa>
Does a strong US Dollar hurt American Manufacturing?
josh
# Does a strong US Dollar hurt American Manufacturing?

(Asked by: username_0 on 2016-01-27)

I am reading this article about the strengthening of the US Dollar when I came across this paragraph:

"But there are reasons to be cautious. A strong dollar will squeeze American manufacturers, which have otherwise benefited from falling energy prices and rising wages in China. That will weigh on growth in the United States and further suppress inflation, which is already well below the Fed’s target."

Am I understanding it correctly that because the Dollar is getting stronger that it will hurt American Manufacturers?

Source article: <http://www.msn.com/en-us/money/markets/the-dollar-keeps-rising-for-good-or-evil/ar-BBoJUq2?li=BBnb7Kz&ocid=iehp>

**Tags:** inflation, usa

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## 1 answers

### Answer by username_1 on 2016-01-27. Score: 11 | Accepted answer

Most manufactured products are sold domestically, but even so a strong dollar will (usually) cause a decline in sales and profitability of US manufacturers. The reason for this is that a strong dollar makes foreign products relatively cheaper, not just manufactured products, but all products. Therefore it becomes cheaper for person to buy, say a foreign-made washing machine compared to an American-made washing machine.

What news articles like this don't mention is that a weak dollar hurts Americans because it makes everything they buy, like gasoline, more expensive, not just manufactured goods.

The exception to the rule is during wartime. For example, as a result of World War II the United States dollar became stronger AND manufacturing profitability increased at the same time. But this was because competitors in Europe had all their factories in ruins, which is not the case today obviously.

> **Comments:**
> **username_2**: There are probably several exceptions to the rule. It just means that the exchange rate is not the only factor in manufacturers profitability.  
> **username_3**: Quality+preferences being another two...  

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