Like it or not, reality TV star and billionaire businessman Donald J. Trump is the President-Elect of the world’s largest economy, the U.S. The Donald won Tuesday’s election in surprising fashion. Despite all the controversies during his election campaign, he was able to come out ahead. Trump won the election in commanding fashion. Despite losing the popular vote to Democrat presidential hopeful Hillary Clinton, Trump won the election in a landslide. If the polls were any indication, this isn’t what anyone expected either. What does President Trump means for the us up here in Canada? Let’s have a closer look.
Stock Markets Close Up
Similar to Brexit, stock markets were expected to crash worldwide if Donald Trump became President. While markets were down at first, markets ended up rallying and closing up the day after on Wednesday.
What calmed markets? It’s most likely due to Trump’s victory speech early Wednesday morning. Trump was gracious and humble in his acceptance speech. He actually seem downright presidential. This is good news for investors worldwide. Investing is a long-term strategy. Panicking and selling all your stocks to put all your money in cash is the last thing you want to do right now. You want to stay invested for the long haul.
Trump won the presidency on the campaign slogan of “making America great again” by increasing infrastructure spending, cutting taxes and making American a more business-friendly environment. This appears to be resonated with many voters in the U.S.
What Does President Trump Mean for Canada?
Global trade has come under fire in recent months. If you want proof, look no further than the United Kingdom who voted to leave the European Union after the Brexit vote. Trump hasn’t been shy about voicing his opinion on trade: he’s all for trade, as long as it benefits America. During one of his stop during his presidential campaign he said, “I like free trade, but free trade is not free trade, it’s dump trade because we lose with China, we lose with Mexico, we lose with Japan and Vietnam and every single country that we deal with.”
Trade experts say the TPP is dead in the water (although there was no guarantee it would go through if Hillary Clinton was elected President). A Trump presidency also likely spells trouble for NAFTA. Trump has promised on numerous occasions to renegotiate NAFTA. If he isn’t able to get a better deal for America, he’s said he will go a step further and tear it up. Talking tough about trade is nothing new in American politics. Barack Obama was critical of trade leading up to his victory in the White House, but never followed through. Although it remains to be seen if Trump will actually follow through, this introduces a lot of uncertainty with our largest trading partner.
One area of the Canadian economy that could actually benefit from a Trump presidency is real estate. Many Americans said they would consider moving to Canada if Trump became President. With the reality of a Trump presidency settling in, will they follow through on their promise? This remains to be seen. Nevertheless, aided by our low Loonie, our real estate market remains attractive for U.S. investors looking for a home away from home. It will be interesting to see if the Federal Reserve hikes interest rates in December like many are expecting. This could lead to an even lower loonie.
Are you worried about how a Trump presidency will impact your investments? Is any of your family in the U.S. interested in moving to Canada? We have a team of experts on hand to assist you. Feel free to contact our office today.