Why Canadians should pay attention to the United States presidential election

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Canada should pay attention to the upcoming United States presidential election as it could rock relations with its biggest trading partner, according to one expert.

Greg Valliere, chief U.S. policy strategist at AGF Investments, says Canada’s relationship with the U.S. “could be a bit choppy” if former president Donald Trump wins the election in 2024.

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“The bigger impact would be if Donald Trump won,” Valliere said in a recent interview with the Financial Post’s Larysa Harapyn. “It would be quite a departure from the fairly stable policies we’ve seen with Joe Biden.”

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The implications of another Trump presidency would be felt not just on both sides of the border, but also across financial markets globally. “A lot of the NATO countries would have good reason to be nervous about Trump as well as many of our adversaries as well,” said Valliere.

Tensions between a Trump administration and the U.S. Federal Reserve would also put markets on edge, said Valliere, who believes Trump would try to fire chair Jerome Powell immediately after inauguration.

“The relations would be terrible,” he said. “The two cannot work together on fiscal policy.”

Valliere also sees deficits rising under a Trump presidency, despite him being a conservative Republican.

“He has no reservations about spending vast amounts of money,” he said. “Not only do I not see any deficit reduction, I think under Trump, deficits could actually go higher.”

Another big difference between the two presidential candidates is aid for Ukraine and Israel. Valliere said while Biden wants to provide robust new spending for Ukraine and some for Israel, Trump supporters are increasingly hesitant about spending more on Ukraine.

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“The U.S. will start to look much more isolationist if Trump were to win,” he said.

On the other hand, if Biden were to win, Valliere doesn’t foresee many changes to U.S.-Canada relations other than some disputes over electric vehicles and Canada’s contribution to NATO.

Overall, he believes that both candidates are “deeply flawed” based on Biden’s age, his son’s potential criminal hearings, Trump’s criminal allegations and more.

“It’s possible that he could be president, believe it or not, while still under indictment,” he said. “We’ve never seen anything in the U.S. quite this remarkable.”

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Despite all these factors, Valliere believes the U.S. outlook is “pretty good” based on moderate economic growth and falling inflation and interest rates.

“Despite all of the noise, the economic environment in the U.S. could be surprisingly good,” he said. “I’d even go as far as to say it’s almost Goldilocks — not too hot, not too cold.”

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