# Mar-a-Lago Accord > [!info] Not the club > This page is about a proposed currency-and-trade bargain. For Trump's Palm Beach estate and private club, see [[Mar-a-Lago]]. The **Mar-a-Lago Accord** is the shorthand for a proposed grand bargain in which the United States would use tariffs and its security guarantees as leverage to make trading partners accept a weaker dollar and share the cost of the dollar's reserve role. The name echoes the 1985 Plaza Accord, which was negotiated at a New York hotel; this one is named for [[Donald Trump]]'s Florida club. It was never a signed agreement. It is a blueprint, and its most-cited version came from [[Stephen Miran]], who went on to chair the Council of Economic Advisers and to sit on the [[Federal Reserve]] Board. ## The blueprint Miran set out the argument in **"A User's Guide to Restructuring the Global Trading System,"** published by Hudson Bay Capital in **November 2024**, while he was a senior strategist at the hedge fund. Trump named him CEA nominee the next month. The paper's chain of reasoning: | Step | Claim | |---|---| | Diagnosis | The dollar is persistently overvalued because the world needs dollars and Treasuries as reserve assets. That reserve demand, not just US fiscal policy, drives the [[Trade Deficit]] and the loss of manufacturing. | | Leverage | [[Tariffs]] come first, both as revenue and as a bargaining chip. Miran argued tariffs need not be inflationary because the dollar would rise to offset them. | | Security link | The US security umbrella is a public good that allies should pay for. Trade terms and defense guarantees can be tied together. | | Multilateral route | Partners would agree to strengthen their own currencies and to term out their Treasury holdings into very long bonds, potentially century bonds. | | Unilateral route | If partners refuse, Treasury could charge a "user fee" on foreign official holders of Treasuries. ING's reading of the paper puts the opening suggestion at a 1% fee on interest payments. | Critics focused on the debt swap. Jeffrey Frankel, writing for Harvard's Belfer Center in March 2025, said that forcing foreign central banks into 100-year bonds that pay no coupons would amount to a default. ING's analysts used the same word. Frankel's broader objection was a contradiction: an administration cannot both discourage foreign central banks from holding Treasuries and preserve [[Dollar Dominance]]. "The US Administration can't have its cake and eat it too." ## The Hudson Institute speech As CEA chair, Miran gave the theory its public form at the [[Hudson Institute]] on **April 7, 2025**, five days after the [[Liberation Day Tariffs]]. He did not use the phrase "Mar-a-Lago Accord." He said "the reserve function of the dollar has caused persistent currency distortions" and that "Americans have been paying for peace and prosperity." He then listed what partners could do instead: accept tariffs "without retaliation," open their markets, buy more American weapons and goods, build factories in the US, or "simply write checks to Treasury that help us finance global public goods." The last option is the user-fee idea in plain words. ## What actually happened, 2025–26 No accord was signed. Pieces of the blueprint arrived one at a time, and some arrived without being called by its name. - **Tariffs as leverage.** The Liberation Day tariffs, imposed under the [[International Emergency Economic Powers Act]], were the leverage the paper had described. The Supreme Court struck them down in [[Learning Resources v. Trump]] on February 20, 2026. The administration replaced them with a temporary [[Section 122]] surcharge and then [[Section 301]] tariffs, in effect from July 24, 2026. - **The dollar fell anyway.** The dollar index ended the first half of 2025 down about 10.8%, its worst first half since 1973 (Business Insider; S&P Global put it at "nearly 11%"). It finished 2025 down roughly 9.5%, its largest annual drop since 2017 (Business Standard; KUOW said "over 9%"). That slide came from markets, not from a negotiated deal. - **Treasury kept the strong-dollar language.** Treasury Secretary [[Scott Bessent]] told the House Financial Services Committee in May 2025 that "the conditions for a strong dollar" mattered, and blamed partners who were "manipulating and suppressing their currencies." At the same hearing Rep. Bill Foster described Bessent as having "reportedly been placed in charge of negotiating" the accord. The IELP blog reported the exchange, and Treasury has not confirmed any such mandate. - **The yen operations.** On January 23, 2026 the New York Fed ran "rate checks" on dollar-yen with trading desks, a traditional warning shot before intervention. The Fed later said it did so at Treasury's request (CFR; Reuters via Kitco). On **July 31, 2026** the Treasury joined Japan in a joint intervention to strengthen the yen. PIIE's Maurice Obstfeld calls it the first US intervention supporting the yen since June 1998, and Al Jazeera the first joint US–Japan action since 2011. The US sold euros rather than dollars. Treasury's own ledger shows the [[Exchange Stabilization Fund]] moving $500 million from euros into yen after the July 31 operations, which settled August 5. Bessent said Washington "will not hesitate to participate in further joint intervention." Rebecca Patterson of the [[Council on Foreign Relations]] argued in January 2026 that parts of the blueprint had already become policy, including tariffs and higher allied defense spending, and that dollar intervention was the next piece. Obstfeld's August 2026 assessment was that the stated goal of the yen operation "is a more competitive (i.e., weaker) dollar." That is the accord's aim, pursued one partner and one operation at a time, without a summit or a signed text. ## The Plaza precedent The model everyone cites is the **Plaza Accord**, signed **September 22, 1985** at the Plaza Hotel in New York by the G5 finance ministers and central bankers: the United States, [[Japan]], West Germany, [[France]] and the [[United Kingdom]]. Treasury Secretary James Baker drove it for the [[Ronald Reagan]] administration. The dollar had risen roughly 50% against those four currencies between 1980 and 1985 and had peaked in February 1985. Congress was moving toward protectionist trade bills. The communiqué said "some further orderly appreciation of the non-dollar currencies is desirable." The dollar fell about 4% on the first trading day. From the eve of Plaza to the eve of the next accord, it fell from about 242 yen to about 160 and from about 2.91 Deutsche marks to about 1.84, roughly a third against both. Frankel puts the full 1985–87 decline from the peak at about 40%. PIMCO's retrospective credits most of the move to monetary easing under [[Paul Volcker]], with the Fed's rate falling from about 12% in October 1984 to 6% by December 1986, rather than to intervention itself. The **Louvre Accord** of **February 22, 1987**, signed in Paris by the G6 (the G5 plus [[Canada]]; Italy attended but declined to sign), reversed course. Its goal was to stop the dollar falling and hold exchange rates near their levels at the time. Plaza is a poor template for three reasons. Its partners were treaty allies acting voluntarily, not under tariff threat. It involved no change to the terms of anyone's Treasury holdings. And it worked mainly because the Fed was easing anyway. The Mar-a-Lago blueprint asks for coercion, a restructuring of the debt, and an aligned Fed. In 2026 that last item is the political fight over [[Central Bank Independence]]. ## Why it matters here The accord turns the dollar's reserve role from a privilege into a grievance. It treats America's security guarantees as something to price, and it makes tariffs into bargaining chips. Its author moved from a hedge fund to the White House and then to the Fed. Its dollar target was partly reached in 2025 without any deal. In 2026 its tools are being used piecemeal through Treasury's [[Exchange Stabilization Fund]] and Fed operations. The open contradiction Frankel identified remains unresolved: an administration that wants a weaker dollar, cheaper borrowing and permanent dollar dominance is chasing three goals that pull against each other. ## See also - [[Stephen Miran]] · [[Scott Bessent]] · [[Mar-a-Lago]] - [[Dollar Dominance]] · [[De-dollarization]] · [[Petrodollar]] · [[Bretton Woods Conference]] · [[Nixon Shock]] - [[Exchange Stabilization Fund]] · [[Central Bank Swap Lines]] · [[Federal Reserve]] · [[Department of the Treasury]] - [[Tariffs]] · [[Liberation Day Tariffs]] · [[Learning Resources v. Trump]] · [[Trade Deficit]] · [[Economic Nationalism]] - [[Global Economy Hub]]