How the Incredible Shrinking Trump Dollar Impacts US Consumers
By Goldsea Staff | 17 Feb, 2026

Between January 2025 and January 2026 Trump policies have had a startling effect on the prices of cars, consumer electronics and, most of all, European travel.

The US dollar fell approximately 11% in the first half of 2025, marking its biggest decline since 1973, and is down about 9-11% overall from January 2025. The exchange rate shifted from near-parity at 0.96 euros per dollar in early 2025 to approximately 0.83 euros per dollar by January 2026. By late January 2026 the Dollar Index hovered around 96.54, down 10.91% over the previous 12 months.

Impact on Electronics

Electronics have experienced notable price increases, though the impact is complicated by tariffs imposed in April 2025:

The Consumer Technology Association estimated that tariffs on everyday tech could slash US purchasing power by up to $123 billion annually. Laptops and tablets saw some of the largest projected price jumps, with estimates suggesting prices could rise roughly 34% under certain tariff scenarios, while video game consoles faced potential price increases of about 69%. The weaker dollar compounds these effects by making imported components more expensive, though it's difficult to separate tariff impacts from currency depreciation impacts.

Impact on Cars

The automotive sector shows clear price pressure:

The average marketed price increase on 2026 model vehicles was nearly $2,000, compared to an approximately $400 uptick during the previous year's model changeover.  Cox Automotive estimates that tariffs have theoretically added roughly $5,200 per imported vehicle at the border, or about $2,500 per vehicle when spread across all vehicles sold. Like electronics, car prices are affected by both tariffs and the weaker dollar making imported vehicles and parts more expensive.

Impact on European Travel

Interestingly, European travel has become *more affordable* for Americans, not less, despite the dollar's overall decline:

While the dollar weakened against many currencies, economists noted that the euro weakened against the US dollar, meaning American tourists' purchasing power in Europe could rise "pretty significantly". However, high airfare, rising hotel prices, and overall travel expenses are still pushing travelers away, with the share of US travelers planning a European vacation dropping from 45% in 2024 to 37% in 2025.

Additionally, a new ETIAS travel authorization fee for EU entry increased from the originally proposed 7 euros to 20 euros (approximately $24 at current exchange rates), adding to travel costs.

In summary, Americans have lost significant purchasing power for electronics and cars due to the combined effects of dollar depreciation and tariffs, while paradoxically gaining purchasing power in Europe due to the euro weakening even more than the dollar.