Donald Trump took time out of the fiercely contested presidential campaign this week to visit one of his golf courses in Scotland. Arriving there Friday, he commented on U.K. voters' unexpected decision to leave the European Union, saying that the vote would mean more business at the resort, Trump Turnberry.
Trump's comments revealed one way the presumptive Republican nominee's financial holdings worldwide could create conflicts of interest if he wins the presidential election in November. The price of the pound plummeted after the U.K. referendum, which Trump said would make it cheaper for international tourists to visit his Scottish resorts. Yet that same decline in the pound will also put U.S. golf courses at a disadvantage relative to their competitors in Scotland.
On the campaign trail, Trump promises to defend U.S. firms' interests vigorously. Yet he stands to make money if economic trends favor their competitors overseas.
“When the pound goes down, more people are coming to Turnberry, frankly,” Trump told reporters in Turnberry. “For traveling and for other things, I think it very well could turn out to be a positive.”
The price of the pound declined from $1.47 to $1.38 Thursday night, the worst day on record for the currency .
To be sure, Trump also owns a number of businesses in the United States that rely on international tourism, notably his casinos. Declines in the price of the U.S. dollar relative to other currencies could benefit him financially on net.
Yet Trump has not made public many details about his financial position, breaking longstanding practice for the presidential nominees of major political parties in refusing to disclose his tax returns. As a result, it is impossible to say whether Trump might have to choose between the interests of U.S. firms and workers and his own pocketbook if elected president.
When other currencies become more expensive relative to the dollar, goods produced in America — from Chevys to shale gas — become cheaper for international customers to buy. U.S. exports increase, and the workers who make them benefit. So do firms in the United States that rely on international tourism, since taking a vacation in the United States becomes cheaper.
When other currencies become less expensive relative to the dollar, as was the case with the pound Thursday night, Americans benefit in other ways. Goods produced abroad become cheaper, meaning reduced prices at department stores and groceries. Yet U.S. manufacturing and U.S. workers, whose interests Trump has pledged to champion on the stump, lose business.
The fact that Trump has interests inside and outside the United States could create a powerful financial incentive for him, using the power of the Oval Office, to influence exchange rates to benefit his companies.
Typically, U.S. presidents sell their financial assets and put them in neutral securities, such as index funds or certificates of deposit, in order to minimize potential conflicts of interest. At a debate earlier this year, Trump gave an ambiguous answer to a question about what he would do with his assets if elected, saying he would turn his organization over to his children.
"I would probably have my children run it with my executives and I wouldn’t ever be involved because I wouldn’t care about anything but our country, anything," he told Maria Bartiromo of the Fox Business Network.
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