TRUMP CHANGE: The Donald orders halt to US penny production

Donald Trump is putting his money where his mouth is — or at least his two cents worth — in a bid to let the dollars take care of themselves.

The US president on Sunday announced via his Truth Social platform that he has ordered the US Treasury to halt production of the one-cent coin, citing its costliness and lack of necessity in a digital economy.

The penny, a staple of American currency since 1793, is one of the oldest US coinage denominations. Technically, it’s not even called a ‘penny’ but rather, a ‘cent’ or 1% of a dollar.

“For far too long, the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!” Trump wrote. “I have instructed my Secretary of the US Treasury to stop producing new pennies. Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time.”

The decision reflects broader global trends. Canada eliminated its penny in 2012, citing production costs and declining cash usage. 

The United Kingdom has significantly reduced minting small denominations, and many European nations have already abandoned low-value coins, rounding cash transactions to the nearest five or ten cents.

The US Mint’s 2024 annual report revealed that producing a single penny costs 3.69 cents, marking the 19th consecutive year that the coin’s manufacturing expense has exceeded its face value. In contrast, Canada’s decision to phase out the penny was projected to save taxpayers $11 million annually.

Despite compelling economic arguments, Congress has repeatedly failed to retire the penny. While some argue that eliminating it would simplify transactions and reduce waste, supporters claim it helps keep prices stable and plays a role in charitable giving.

Wall Street analysts suggest that the move could accelerate the shift toward electronic payments, benefiting digital transaction networks like Visa, Mastercard, and real-time payment systems. “A penny shortage could push more retailers to round transactions and nudge consumers toward digital payments,” said TD Cowen analyst Jaret Seiberg.

But there are questions over whether Trump has the authority to discontinue the ubiquitous coin.

Under the US Constitution, only Congress holds the power to regulate coinage, raising questions about whether the president can unilaterally discontinue a currency denomination. Federal law does give the Treasury Secretary discretion over coin production, but legal challenges could arise, especially if businesses struggle to access small change.

The debate may also extend to other coins. The US Mint currently spends 13.78 cents to produce a nickel, far exceeding its five-cent face value. If the penny is discontinued, calls to phase out the nickel may follow.

The penny has undergone many transformations since its introduction in 1793. Initially a large, pure copper coin, it was later resized and redesigned, featuring the Indian Head motif before Abraham Lincoln’s portrait was introduced in 1909, on the 100th anniversary of his birth. 

The 1909 Lincoln penny was called "emancipation money" by many black Americans because Lincoln's actions to end slavery were seen as a step towards emancipation. 

Over time, its reverse design has included wheat sheaves, the Lincoln Memorial, and, since 2010, the Union Shield.

Despite its long history, the penny’s relative utility in daily transactions has steadily declined. With more Americans using credit cards, mobile payments, and digital wallets, physical cash — particularly small change — is becoming less relevant.