What did Donald Trump do today?

He showed off another facet of his financial illiteracy.

Trump retreated to social media again today in his attempt to force trade concessions from Canada. Nothing else has been working for him: Canadians are absolutely galvanized against Trump's demands, and are completely politically united against giving him any further ground. This morning's post was a mystifying complaint about the US-Canadian "dollar imbalance:"

Canada's (currency) Dollar imbalance with the U.S. is unacceptable. It has been that way for years - but no longer! President DJT 

As of today, a US dollar (USD) is worth about $1.38 Canadian dollars (CAD). With a few brief exceptions, that's roughly where the exchange rate has been for the last fifty years: trading about 30-40% above "par."

 

What's more, the CAD is not at all a weak currency by global standards. It's generally regarded as one of the strongest currencies in the world, right next to the USD. 

Trump is apparently under the impression that $1 USD and $1 CAD should necessarily be equal, possibly because they're both called "dollars." That is simply not how currencies work. The particular ratio between stable currencies is arbitrary. For example, $1 USD is worth about 0.73 British pounds, but the GPB isn't inherently stronger just because the base unit buys more. What makes a currency stronger or weaker is a change over time in that ratio. 

There have only been two brief periods in recent decades where the CAD approached par with the USD. The first was at the outset the "Great Recession" of 2008, which hit the United States much harder than Canada, and the second was shortly afterward during a period of high demand for Canadian commodities like oil and lumber.

If Trump really did want the CAD to gain in strength against the USD, the simplest way would be to stop driving inflation in the United States. That would allow interest rates to fall, which generally weakens a currency. Specifically, Trump could abandon his ultra-high tax regime on imports, especially Canadian imports, which is driving up prices for American consumers. Resolving his war with Iran would be another big step, but much more difficult to do, given the almost inconceivably strong bargaining position he's put Iran in. 

Trump's thoughts on currency valuation was the only text post in a long string of 37 posts that he—or someone using his authority—posted today. Most of the rest were AI-generated images of the type that seem to help soothe Trump's emotions: posing heroically on horseback with George Washington, pretending to work blue-collar jobs, or changing the name of New Mexico to New America and then dancing mockingly.

Why does this matter?

• Facts do not change because Donald Trump can't or won't understand them.
  
  
• "It is bad to trade with other countries and I will do whatever I can to stop it, starting with our biggest trading partner and closest ally" is an objectively insane thing for a president to believe.