Trump ‘Revenge’ Tax Would Weigh on USD Assets: Wells Fargo

Section 899 of the new budget bill, which would tax foreign investors, could weaken the dollar and diminish foreign demand for US assets with potentially “destabilizing effects,” according to Aroop Chatterjee and Erik Nelson at Wells Fargo.

• The analysts wrote about legislation that was recently approved by the House of Representatives as Section 899, which aims to increase tax rates for individuals and companies from countries whose tax policies the US sees as “discriminatory”
• If passed, they “expect reduced appetite for US assets on a flow basis implying higher term premium and wider credit spreads alongside a weaker USD” ...