Trump’s Trade Trap: The Triffin Dilemma

As the Trump administration continues to navigate turbulent trade waters, it’s faced with an impossible set of economic trade-offs. These trade-offs, known as Triffin’s paradox, are key to understanding the United States’ current trade predicament.

The following article was originally published by the Mises Institute. The opinions expressed do not necessarily reflect those of Peter Schiff or SchiffGold.

The trade problem that America faces today is not new. It is rooted in what economists call the Triffin trilemma—also known as the Triffin dilemma or Triffin paradox—named after Belgian-American economist Robert Triffin. This principle highlights a fundamental contradiction: a national currency such as the US dollar cannot simultaneously serve as both a stable domestic currency and the world’s primary reserve currency without generating trade imbalances.