Economist Derek Holt from the Bank of Nova Scotia warned about the possible consequences of the extreme immigration policies proposed by Donald Trump, indicating that they could severely damage the U.S. economy. According to Holt, increasing the debt to 116 percent of gross domestic product with tax cuts would only lead to higher taxes in the future.
Holt emphasized that a second presidential term for Trump would bring extreme protectionism, a negative demographic shock, and debt issuance without fiscal discipline, which would be harmful to both the U.S. and global economies. In contrast, despite the possibility of a tariff war, Trump's fiscal plans could boost risk assets like equities.
The economist pointed out that the U.S. economy does not need a boost, as it has excess demand, so Trump's plans could greatly destabilize global markets. Holt also expressed concern about Trump's foreign policy, mentioning his attitude towards Russia and China as a significant mistake.
On the other hand, Holt noted that inflation and growth outlooks would be similar regardless of who wins the election, according to a Bloomberg economist survey. Although Holt acknowledged that other economists have more balanced views, he firmly believes that voting against Trump is the best option, referring to his supporters as "weak egotists."
The economist also mentioned that Canada is an important trading partner of the United States, sending the majority of its exports to the neighboring country. Holt clarified that his stance is not an endorsement of Kamala Harris and criticized her vote against the trade agreement with the United States, Mexico, and Canada in 2020. According to Holt, Canada must carefully consider its economic interests when choosing its political allies in the United States.
