What Trump’s Election Means for Snowbirds
On November 5th, Americans went to the polls to elect their 47th president after a fierce and eventful election campaign. Despite polls suggesting a neck-and-neck race, the result turned out to be decisive. With over 76 million votes, Donald Trump successfully swept all of the swing states and secured the popular vote to win a second term in the Oval Office.
U.S. elections are always closely watched by Canadians, but this one was especially so. Trump’s first term in office was characterized by highly protectionist policies and a frostier-than-usual relationship between Washington and Ottawa. It was also tainted by political unrest, such as at the Charlottesville “Unite the Right” rally in 2017, the George Floyd protests in 2020, and the storming of the U.S. Capitol on January 6th, 2021.
For these reasons and more, the prospect of a second Trump presidency has many Canadians concerned – concerned not only about the impact on their wallets, but also on their ability to travel safely and freely south of the border. This is especially true for Canadian snowbirds, who spend up to 6 months of the year in the U.S.
What will a second Trump presidency mean for Canadian snowbirds?
We explore five potential areas of concern for Canadian snowbirds and make some educated guesses about what to expect (bearing in mind that predicting the future is more often than not a fool’s errand). These areas include: (1) the Canadian dollar, (2) inflation, (3) border control, (4) import duties, and (5) civil unrest.
The Canadian Dollar
Of primary concern to Canadian snowbirds is the impact a Trump presidency will have on the value of the Canadian dollar. Already the Canadian dollar is trading at nearly a five-year low due to increasing divergence between the Canadian economy and the U.S. economy. The Bank of Canada has been aggressively cutting rates to encourage economic growth, and while the U.S. Federal Reserve has been easing rates as well, it has been doing so at a slower pace due to the United States’ stronger economy. These diverging pathways have led to reduced demand for Canadian dollars as investors chase higher yields.
Following Trump’s election, markets already began to price in a slightly higher neutral rate for the Fed, anticipating that it will cease making rate cuts sooner rather than later. Why? Because Trump’s promise to enact heavy tariffs against Chinese imports is widely expected to be inflationary, thus slowing the pace of interest rate cuts.
All this means that the loonie is likely to continue to get weaker, perhaps bottoming out around 66.7 cents to the U.S. dollar, according to a prediction by Rosenberg Research. And a weak loonie means that snowbirds who spend the winters down in the U.S. will feel the pinch more strongly.
A silver lining to this cloud is that Trump’s election also caused a boom in the S&P 500, as expectations of lower corporate taxes and de-regulation led to a stock-buying frenzy. Depending on how you have your retirement savings invested, you may continue to see strong portfolio growth that will somewhat lessen the impact of a weakening Canadian dollar.
Inflation
Also of concern to snowbirds is how the price of U.S. goods and services will respond to a Trump administration. While inflation stayed relatively low during Trump’s first term, there is reason to believe that a second Trump term might cause prices to rise, despite his campaign promise to the contrary.
For one thing, Trump’s rhetoric around tariffs has been turned up a notch since his first go-around in the White House. Trump 1.0 focused his tariffs mainly on China. Trump 2.0 has been toying with the idea of a 10% blanket tariff on all U.S. imports. If he moves ahead with this decision, most experts agree that such a move would cause businesses to pass along the extra expense to consumers, thus worsening inflation.
Another area of concern for U.S. prices is Trump’s proposed crackdown on illegal immigration. There are an estimated 11.7 million illegal immigrants living in the U.S. currently, and Trump has promised to go after them with the largest deportation in U.S. history. Since undocumented immigrants tend to work in essential but low-wage jobs such as construction, housekeeping, agriculture, food preparation, and landscaping, it is likely that prices for food and certain services will rise as this low-wage workforce is removed from the labour pool.
The upshot is, don’t be surprised if your U.S. grocery bill – or the maintenance fee for your condo – goes up next year.
Border Control
Cracking down on border control was a key part of Trump’s 2024 election campaign. While much of his rhetoric focused on the U.S.-Mexico border, don’t expect the Canadian border to be exempt from his gaze.
Trump’s appointed border czar, Tom Homan, called the U.S.-Canada border an “extreme national security vulnerability” which he plans to deal with on Day 1 of the new administration.
What does this mean for the millions of snowbirds who cross the U.S. border from Canada each year?
The short answer is: it’s unlikely to have a major impact. While you can expect the new administration to devote more resources to policing the northern border, these efforts will be mostly focused on so-called “special interest aliens” who come from countries that are deemed by the U.S. government to sponsor terrorism.
Thus, if you are a Canadian citizen or permanent resident who is visiting the U.S. legally, you can expect to enjoy the same travel privileges that you are used to. Canadian citizens still benefit from visa exemption rules that allow them to visit the United States for up to six months without obtaining a visa. This rule was maintained during Trump’s first term in office, and there is no reason to think that it will be changed now.
The fact is, Canadian tourists, including snowbirds, generate around $22.8 billion of income for the U.S. economy, resulting in a $12.9 trade surplus for the travel sector. As Trump’s economic policies are focused on growing America’s trade surplus with foreign nations, he would be foolish to do anything that would get in the way of this cash cow.
Import Duties
Currently, Canadians who travel to the U.S. benefit from tariff exemptions that allow them to bring certain goods into the country free of charge. For example, Canadians (as well as other non-residents of the U.S.) are allowed to bring in household goods that they have owned for more than one year duty-free. As well, vehicles that are intended for personal use can be brought into the U.S. duty-free for up to one year if it is imported in conjunction with the owner’s arrival.
With a new era of Trump Tariffs on the horizon, it is natural to wonder about the effect his administration might have on the duty-free privileges that snowbirds have come to rely on.
Any concerns that a new tariff policy would apply broadly to goods that are not intended for sale in the U.S. are probably misplaced, however. The goal of Trump’s proposed tariffs is to protect U.S. trade and encourage home-grown manufacturing, so it’s unlikely he would be concerned with overturning exemptions on goods that are not entering the market.
Therefore, you shouldn’t notice any difference in your ability to transport your car to the U.S. along with your pre-owned household goods, free of duty.
Civil Unrest
Trump’s first term in office was highly divisive, with political and racial tensions reaching the boiling point on several occasions. Most notably, he was impeached by Congress for his role in the events of January 6th, 2021, when a mob of his supporters attacked the U.S. Capitol. Some Canadian snowbirds are fearful that a second Trump term could lead to more political violence.
While it’s true that the U.S. electorate is more divided than ever – with a record 80% believing that Americans are greatly divided on the most important values – it’s unlikely that these political divisions will explode into the kind of violence that would pose a threat to visitors. Trump’s victory in the election was decisive, and while many on the political left are unhappy with the result, they overwhelmingly accept the results as legitimate. By contrast, according to an August 2023 poll, nearly 70% of Republicans still believe the 2020 election was stolen by the Democrats. This election skepticism was a key driver of the violence on January 6th.
A second Trump term will doubtless lead to ideological clashes. In particular, his plan to deport millions of undocumented immigrants is certain to create friction with left-leaning states, especially if he mobilizes the military to do so, as he has indicated. Such ideological clashes in the past have led to property damage and even loss of life. U.S. institutions are strong, however, and experience shows that law & order always finds a way of re-establishing itself.
Our best advice for snowbirds is to keep an eye on the Government of Canada’s U.S. travel advisory if safety is a concern. Currently, the risk level is low and we believe it is likely to remain that way.
Final Thoughts
The implications of a Trump presidency for Canadian snowbirds are far from certain. One of the biggest unknowns is to what extent Trump’s campaign rhetoric about imposing across-the-board tariffs is a serious proposal, or simply a negotiating tactic.
Nevertheless, it’s safe to say that the biggest impact is going to be felt in the wallet. In the near term, the Canadian dollar is likely to get weaker, while prices south of the border are likely to rise – a double whammy. If you have retirement savings invested in U.S. stocks, however, you may end up seeing gains to counterbalance some of this loss in purchasing power.
The ability of snowbirds to continue traveling visa-free and duty-free for up to six months of the year is likely to remain unchanged. The fact is that Canadian snowbirds represent a huge boon for the U.S. economy. Any presidential administration would be unwise to put barriers in place to prevent this wealthy demographic from accessing the U.S. economy.
Finally, there is the question of violence. Civil unrest, while always brewing under the surface, is unlikely to bubble up to a level where it would pose a major threat to safety. Undoubtedly there will continue to be many strong feelings on both sides of the political spectrum, but we predict that the major skirmishes will continue to be fought on the battlefield of ideas. The U.S. survived a first Donald Trump presidency, and it will survive a second.
Our advice? Don’t let fear of the unknown get in the way of living your best life. Presidential administrations come and go, but the snowbird lifestyle is constant.
Heading down to the U.S. this winter? Learn more about our car transport service for snowbirds.