The conventional wisdom says tariffs hurt everyone.
Higher prices. Supply chain disruptions. Economic uncertainty.
And that will be the reality for U.S. citizens who stay put. It’s going to be painful, to say the least.
But for location-independent entrepreneurs and digital professionals, the latest wave of Trump tariffs might offer an unexpected opportunity.
The Dollar’s Strength is Your Expat Advantage
The math is surprisingly simple.
As Greg Iacurci reports in CNBC, economists expect the proposed tariffs to strengthen the U.S. dollar against major global currencies. For those of us who earn in dollars but spend in euros, pesos, or other local currencies, this creates an immediate arbitrage opportunity.
“Tariffs, all else equal, are good for the U.S. dollar,” explains James Reilly, senior markets economist at Capital Economics. This isn’t just economic theory – we’re already seeing it play out. The U.S. Dollar Index recently hit its highest level since 2006, and it’s up more than 3% since Trump’s election victory.
As someone who has run my businesses from various global locations, I’ve learned that currency fluctuations can dramatically impact your lifestyle bottom line.
When the dollar strengthens, every expense – from co-working spaces to food to housing – effectively becomes cheaper for dollar-earning location-independent professionals abroad.
Revisiting Geographic Arbitrage
Building a digital business that allows you to work from anywhere opens up new opportunities for geographic arbitrage. Let’s revisit what that means.
Geographic arbitrage means taking advantage of the differences in prices between various locations. You earn money in a market that allows you to make plenty of money in a stronger currency (the U.S.) and spend it in a less-expensive economy (Thailand or Mexico, for example).
If you’ve ever chosen a vacation spot based on the relative strength of your native currency, you’ve engaged in a form of geographic arbitrage. Even spending stronger U.S. dollars in Australia and Canada qualifies as a win.
For example, I know a diverse group of internet entrepreneurs who spend much of the year in Medellin, Colombia. These folks sell their products and services in lucrative western markets, while enjoying the “eternal spring” weather and low cost of living in Medellin, all while contributing to the local economy.
Understanding the Economics Behind Your Opportunity
Bank of America analysts predict the U.S. dollar will remain strong in the short term, largely due to inflationary policies and particularly tariffs. The proposed changes could raise effective tariff rates from 3% to around 20% on U.S. imports.
What does this mean in practical terms?
Paul Ashworth, chief North America Economist at Capital Economics, estimates these tariffs could temporarily boost inflation to 4% in 2025. While that might sound concerning, it creates a unique situation where the Federal Reserve will likely maintain higher interest rates – further strengthening the dollar against other currencies.
Lemonade Out of Lemons
Look, I’m not happy about what’s happening in the United States right now. And I believe things are going to get much worse. But we’ve been planning to leave for sunnier shores for years now, so this just makes the timing more fortuitous.
This isn’t about making a hasty move abroad. It’s about recognizing an economic pattern that could amplify the benefits of location independence.
Whether you’re already running a remote business or considering the transition, the coming months might offer the perfect conditions to make your move. Put those U.S. Dollars to work now, and then plan to diversify down the road before the inevitable currency crash occurs.
