Strategist: 'Humanity' Would Be One Loser in a Donald Trump Presidency
President Donald J. Trump?
That's the question on everyone's mind ahead of the first presidential debate between the real estate mogul and Democratic nominee Hillary Clinton on Monday night. It's also the title of a note by RBC Dominion Securities Inc. Canadian Equity Strategist Matthew Barasch, in which he offers a rundown of how a Trump presidency would impact America's neighbor to the north.
As the former Secretary of State's lead in the polls has narrowed in the run-up to this face-off, Wall Street strategists have been warning that investors need to take the possibility of a Trump presidency more seriously. These recent fluctuations in the polls have been associated with a variety of moves across global markets, including the Mexican peso, longer-dated U.S. Treasuries, and even the Canadian dollar.
In a recent note to clients, Societe Generale FX Strategist Olivier Korber warned that "Canada’s status as a privileged trade partner should be increasingly discounted by FX markets."
But in something of a contrast to analysts who have warned that a U.S. exit from the North American Free Trade Agreement would imperil Canadian propserity, Barasch believes "the sum total of Mr. Trump's policy proposals would be positive for Canada and Canadian stocks, at least for a time."
On immigration in particular, the strategist sees Canada's advantageous position relative to the U.S. growing even more if Trump is elected, citing his plan to deport illegal immigrants and build a wall along the Mexican border.
Canadian policymakers have often bemoaned the country's "brain drain" — the propensity for high-performing individuals in professional services industries to be lured to the U.S. by the promise of higher pay. In the event that Trump prevails in November, Barasch sees Canada benefiting from a brain gain instead.
The loser in this scenario according to the strategist would, however, be humanity.
This table shows the winners and losers of Trump's policies from a Canadian perspective.
"Under Mr. Trump’s plan, the immigration divide between Canada and the U.S. figures to widen even further," he concludes. "Not only would Canada stand to benefit from increased access to lower cost unskilled workers, but also from increased access to skilled immigrant labor as the U.S. market is potentially viewed as less hospitable to immigrants overall."