Yahoo Finance What a Trump Win in November Would Mean for the Cost of International Travel, According to Experts
With the United States presidential election only a few months away and the campaigns off to the races, it’s only a matter of time before the world finds out if former President Donald Trump is re-elected into office. Should he retake the White House, a slew of questions will be asked by the American consumer. One that might be flying under the radar, yet worth taking note of, is what Trump’s potential second term in office could mean for the cost of international travel.
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Are you planning a trip abroad for early next year? GOBankingRates spoke to some experts in economics and politics to get a better picture of just what would happen to the cost of international travel if Trump wins the election in November.
Exchange Rates
As investors anticipate policy changes, a Trump win could result in market volatility, according to Chuck Warren, host of the economic podcast Breaking Battlegrounds.
“Under Trump’s pro-business policies and tax cuts, historically the dollar has been strengthening,” Warren said. “In other words, for every dollar they spend, Americans get more foreign currency.”
“From my experience advising clients on travel finances, I’ve observed that currency fluctuations play a crucial role in travel costs,” said Abid Salahi, the co-founder of FinlyWealth.
That’s because, as Salahi mentioned, “Trump’s tendency towards protectionist policies could lead to a weaker dollar, making international travel more expensive for Americans. During his previous term, we saw the dollar weaken against major currencies, with the Dollar Index falling by about 6.7% in 2017 alone.”
“With a weaker dollar, the same trip abroad would cost my family more money versus just a few years ago,” said Benson Varghese, the founder and managing partner of Varghese Summersett. “However, prices would likely stabilize within a year or two as markets adjust to any new policies.”
“As someone who’s taken my own family on many international trips, I’ve seen currency exchange rates and airline/hotel costs fluctuate drastically depending on who’s in the White House,” Varghese continued.
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Trade Policies
“Under President Trump’s first term, his administration focused on trade deal renegotiations and tariff imposition,” Warren said.
Several factors could affect the price of international travel if Trump wins the election, according to Isabella Brown, a politician and campaign manager for Qualify Candidates, who thinks one of these is the possibility of changes in international relations and trading agreements.
“Tariff tensions and trade wars were recorded under Trump’s last government which can recur to disturb global markets,” Brown said.
“Indirectly this can also impact travel costs if similar policies are reintroduced as it may have an effect on the price of goods and services in some countries thereby indirectly impacting travel costs,” Warren highlighted among other things such as “imported products with high taxes may necessitate paying back by having expensive tariffs to discourage people from traveling to or from such places.”
Fuel Prices
“Travel costs such as fuel and airline parts might increase if imported goods and materials attract tariffs again or their tariffs go up, which would eventually result in higher airfare prices and travel expenses,” Brown said.
“Lower energy prices may be expected if Trump fulfills the promise of his campaign to promote domestic production,” Warren said. “Reduced aviation expenses can result from this, pushing airfares downwards as well.”
However, Warren was clear that “…there is also a possibility for geopolitical tensions that could oppositely affect oil supply and prices.”
Tourism Policies
“Government policies on travel ban and visa regulations are other indicators with a direct impact on travel demand and pricing,” Warren explained. “These tougher controls might lower inbound and/or outbound travel, thereby affecting overall market dynamics together with pricing.”
Generally speaking, Varghese stated that “…a Trump victory could weaken the dollar relative to currencies in Europe and Asia.”
“This is because his ‘America First’ policies tend to be dollar-negative, whether it’s scrapping trade deals, ramping up tariffs, or restricting immigration,” Varghese added.
In Brown’s professional opinion, “Further, changes in investor confidence and economic policies implemented by the Trump administration may cause shifts in the value of the U.S. dollar on the world market.”
“A strong dollar may make it cheaper for Americans to travel abroad while a weak dollar might mean high travel expenses,” Brown summed up. “The overall effect on international flight prices would depend on how these forces are balanced against each other, as well as specific policies put into place.”
More Affordability
Tatiana Tsoir, the CEO and CPA for Linza Advisors, had a different take on Trump’s second term in office and the price of international travel: It will go down.
In a prediction, Tsoir stated that the “price of international travel I expect to decline. The reason being that Trump in the past has supported tax reductions for the middle class and corporations to stimulate business activity and exports.”
Additionally, Tsoir said that “…having started no wars during his presidency, I’d expect the Russia-Ukraine war and Israel-Hamas war to decline or cease to exist, and travel will be less restricted allowing for economies of scale and efficiencies for airlines and therefore price drops, or return to normal rather.”
Overall, an intricate and complex mixture of currency fluctuations, unpredictable trade policies, and even immigration laws might make traveling to international destinations less of a straight path for American travelers. While there is a chance prices might drop when it comes to airfares and tickets, there’s no guarantee that anything would resemble the costs to match the current market.
Salahi was adamant about reminding American consumers that these predictions from him and the other economic experts “are based on historical trends and economic principles” with nothing set in stone.
“Still, it’s important to note that the outcomes depend on various factors, including global financial conditions and potential policy implementations,” Salahi strongly reiterated. “The economic landscape is complex and interconnected, and these changes likely have ripple effects across multiple sectors of the economy.”
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This article originally appeared on GOBankingRates.com: What a Trump Win in November Would Mean for the Cost of International Travel, According to Experts
