What a night! An election for the history books and one that has the potential to re-write the political landscape around the world. The pundits –particularly those on the left of the spectrum, predicated chaos and market turmoil if Donald Trump was elected President. The result? The next day markets posted strong gains, suggesting that the doomsayers, like the pollsters themselves, got it all wrong.
After the shock and awe of it wears off, the question turns to the economy and markets which are wondering what a Trump Presidency will mean over the next four years. Truthfully, no-one knows but as was written here in an earlier Around the World posting, we pointed out that the system of government in the US is designed to stop things from getting done. That said, with the Republicans in control of Congress, Trump’s political agenda will all but certainly include a roll-back of much of Obama’s legacy. To the victor goes the spoils the saying goes, as evidenced by our current federal Liberals, who are dogmatically dismantling Stephen Harper’s Conservative legislation.
Will the Keystone pipeline be built now? The odds look good on this front, making Trudeau’s task of balancing the need to get Alberta’s oil to foreign markets while appeasing environmentalists much easier. But that’s likely the only thing that the federal Liberals will find easier. Trump campaigned on a platform to Make America Great Again, by putting American interests first. Trade agreements will come under review and Canada, like other trading partners, will simply have to wait to see what changes if any are made.
In politics, making predictions is challenging with so many variables in play. But here’s one that is all but guaranteed: the bromance between Obama and Trudeau ended last night, and Trudeau can expect a far chillier reception from President Trump. Bi-lateral relations will take a hit, as the US Republican agenda can be described as the mirror opposite of Canada’s Liberals. A Republican dominated Washington will bring a pro-business, strong military, national-security focused agenda that recognizes that the best way to help those workers affected by globalization is a strong economy that creates employment through de-regulation and lower taxes. All anathemas to Liberals who follow ruinous tax-and-spend policies that are bankrupting the Canadian economy, while all the while attempting to sooth us with flowery, ‘social license’ rhetoric. We’re predicting a Trudeau ulcer by Easter time, as the good old days when the Democrats were in the White House fades into his memory. Such is the way with politics, but know this: Donald Trump was elected President of the United States and the world hasn’t come to an end. The sky hasn’t fallen, the oceans haven’t tuned to blood and your portfolio is well positioned for anything we see on the horizon for the next 4 years. So get a good night’s sleep tonight and rest well. You’re in good hands.