Following a surprising U.S. presidential election, both major political parties are facing a realignment of priorities, said Lew Lukens, senior partner at Signum Global Advisors, during the keynote session at the Canadian Investment Review’s 2024 Investment Innovation Conference.
Lukens was surprised by Donald Trump’s win in November since he projected the democratic candidate Kamala Harris would win the presidency. Instead, Trump won by an 86 electoral vote margin and also secured the popular vote.
“We were wrong. At the end of the day, . . . Americans really cared about the cost of groceries, the cost of housing and the cost of gas . . . . That’s the main driver of the forces that are putting Donald Trump back into the White House.”
Read: What could a second Trump presidency mean for Canadian institutional investors?
The Democrats are poised for a lot of soul searching after the infighting about the lost election ends, he added, while the Republicans are facing a future reckoning when Trump’s presidential term ends and the party will require a definition of what it stands for.
“I think the debate and the discussion within the Republican party becomes: ‘Are we the Trump and [Make America Great Again] party going forward indefinitely? Or do we revert to what we used to be — small government, low taxes, we care about our international alliances and our partnerships around the world, national security kind of party?’”
Before the expected review of the Republican party alignment, Lukens expects a united party during Trump’s second go at the White House. Instead of in-fighting and resistance to the president-elect, he noted he believes the party is now devoted to him.
“This is Donald Trump’s party and we’ll see that in Congress. We’ll see that in the staff around him in his cabinet. The guard rails that were in place for his first administration just aren’t going to be there this time.”
Read: What U.S. election uncertainty means for institutional investors
When it comes to current global challenges, Lukens also said he doesn’t believe in Trump’s ability to find meaningful resolutions for ongoing conflicts in the Middle East and the Russian invasion of Ukraine. He expects Trump’s close relationship with key players in both scenarios likely won’t mean the end of those conflicts.
Trump has promised the use of tariffs on U.S.’s economic allies and partners, including Canada and Mexico. Lukens recommended Canadian leadership focuses on its relationship with the U.S. administration, since Trump is a transactional politician.
Pundits and political experts struggled to pin down whether they could take Trump’s word at face value during his first presidential term, noted Lukens, but he said, this time around, he believes what the president says.
“I think some people who voted for him are surprised to find out that he is planning to implement policies that are actually potentially going to hurt them . . . . With Donald Trump, you have to take pretty seriously what he said during the campaign trail.”
Read more coverage of the 2024 Investment Innovation Conference.