Americans Living Abroad and the New Trump Administration

A new presidential administration just took office. This will certainly mean a lot of changes. Many are wondering how this new administration will affect their day to day lives. One group in particular that is curious about how the Trump administration will affect them is Americans living abroad, specifically those living south of the border in countries like Mexico, Belize, and Nicaragua.

Whether it be living abroad through a work visa, permanent residency, or even as a dual citizen, it is imperative for these people to know how this new presidency will affect their living status.

The answer to this question is varied at best. Some naysayers say things could get worse, while others are looking at the bright side of the situation. Of course, nothing can be said for certain at the moment.

The country that is most likely to be affected by the Trump presidency is Mexico. One of President Trump’s most vocal campaign promises was to build a wall along the U.S.-Mexico border and have the Mexican government pay for it. Although Mexico’s president, Pena Nieto, has explicitly stated he does not intend on paying for this wall, Trump’s promise persists.

Some fear this could cause retaliatory measures from Mexico, who, if it is pressured into building a border wall, may decide to get the money through taxes placed on American companies and possibly even Americans living there. Even those who fear retaliation from the Mexican government, however, admit that they don’t think it is likely to happen.

Don Nelson, a U.S.-based American attorney specializing in expat and international taxes, noted that Mexico has a “history of retaliation.” Still, he added, he believes that Americans living abroad should have no fear of being asked to leave Mexico. “They won’t kick us out because they need us,” he noted.

Another major consideration for Americans living abroad is the Foreign Earned Tax Credit, which currently allows qualified expats to exclude over $100,000 annually from their U.S. tax return. This tax credit plays a major factor into the budgets of countless Americans abroad, and for it to be scaled back or even removed would have a significant impact on the lifestyles of thousands of Americans abroad.

However, many believe that there is no cause for worry. Michael Cobb, an American expat himself and CEO of ECI Development, which has real estate developments in Nicaragua, Belize, and Panama, had this to say, “I would find it very unlikely that the Foreign Earned Income Exclusion would be changed.”

He noted that countless individuals and companies of all sizes depend on this tax credit to properly operate their businesses and compensate their employees. This makes an alteration to the credit a difficult change to make for the Trump administration.

In many ways, a Trump presidency could be a good thing for Americans living abroad. The Mexican peso has been getting devalued against the U.S. dollar in previous years, and if this trend continues, it will mean greater buying power for Americans living in Mexico.

In addition, it should be noted that whatever the impact of the Trump presidency upon Americans living abroad, it will still be radically cheaper to live abroad than to stay in the U.S. Americans living in Nicaragua, Belize, and Mexico can still enjoy a greater quality of life for a lower cost of living than they would be able to in the U.S.

Beyond changes in government policies, there may also be changes in cultural trends. Some Americans living abroad fear that the Trump presidency may cause them to become the target of ire from those in their host country. Mr. Cobb had this to say about future relations between foreigners and Americans living abroad, “They can and often do like the American people, but not the American government. They’re used to this, and it should continue.”

Others see the Trump presidency as an opportunity to improve the lives of Americans living and doing business abroad. Wayne Robbins, who runs a large residential and mixed-use development in Belize, believes that this new administration could be a chance for the U.S. to reevaluate its trade agreements. He believes that if the U.S. reevaluates its trade agreements, “It can have a fresh look at the advantages of trading with countries like Belize much more than it does now.”

Mr. Trump has officially been president for less than a week now, so it is unclear yet what impact his administration will have on Americans living abroad. It still remains, however, that thousands of Americans have found themselves calling a foreign country home. These people are still able to enjoy all of the benefits of a life abroad: a lower cost of living for a higher quality of life, beautiful weather year-round, and a friendly multicultural atmosphere. These things certainly won’t change, no matter what the new administration does.

I hope you enjoyed reading Americans Living Abroad and the New Trump Administration. Here are a few articles that I think you’ll love!

Guide to Foreign Tax Credit, Foreign Tax Treaties and Foreign Housing Exclusion

The Main Types of Expats: Which One Are You? (Part 2)

Becoming an Expat in Argentina (Part 2)