Nov 19 (Reuters) - To achieve his aims, Donald Trump may need the United States to abandon the strong dollar policy that Robert Rubin first said was in the nation's interest in 1995.

Since then the U.S. has largely adhered to this policy with the notable exception during Trump's last term in office when the merits of a weaker dollar that were aired officially briefly weakened the greenback.

After Trump left office in January 2021, the dollar soared 17.5% to a more than 20-year peak in October 2022, and following his 2024 election win the dollar is approaching that peak again.

Much demand for dollars has surfaced in the wake of the new president's threats to impose tariffs, which have not only seen traders seeking safety in the dollar, but also stirred worries about the inflation that may be generated, resulting in a higher U.S. interest rate and adding to the dollar's allure.

The yuan and euro have slumped, increasing the advantage already held by eurozone and Chinese exporters.

Should Trump make good on his threats after he takes office and a trade war results, the dollar could rise much further, making a bad situation for U.S. trade much worse.

One way that the next U.S. administration can directly tackle this issue is to abandon the strong dollar policy that its tariff policy would bolster, and should that happen, there will be serious consequences for the many traders now betting on the dollar rising, or banking on it being safe.

Should the incoming Trump administration not change U.S. currency policy, then the imposition of any tariffs will surely send the greenback higher, likely worsening the competitive situation for U.S. exporters even with big tariffs in place.

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(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

((jeremy.boulton@thomsonreuters.com))