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https://www.ft.com/content/b1bf0858-d7d5-489d-8d61...




This month, many investors feel dazed and confused. No wonder: as the US government flirts with another shutdown and President Donald Trump intensifies his trade war, indices of economic uncertainty have skyrocketed above even the 2020 pandemic or the global financial crisis of 2008.

But the uncertainty could get worse. For amid all the tariff shocks, there is another question hovering: could Trump’s assault on free trade lead to attacks on free capital flows too? Might tariffs on goods be a prelude to tariffs on money?



I think this is the concern (for foreign investors) and this is probably the trigger for the OT:out


“[The trio’s] ultimate goal isn’t a series of bilateral [trade] deals but a fundamental restructuring of the rules governing global trade and finance [to remove] distorted capital flows,” says McNair. “Whether this approach succeeds remains to be seen, but the strategy itself is more coherent and far-reaching than most observers recognise.”



tecmo
...

It doesn't have to be anything as exotic as taking measures attacking free flows of capital. Nearly every developed country has a tax treaty with every other developed country. All it would take for a foreign investor to be royally screwed would be a unilateral rescission of those tax treaties. So, instead of having a withholding tax of 15% on interest and dividends, it could suddenly be 75%. Or, as a riff on Mungo's preoccupation with treasuries, it could be that a withholding tax would suddenly be applied to principal repayments as well as interest and dividends. And forget about the 0% withholding rate for retirement accounts.

Now, you might say, "Stubble, that's ding-bat stuff. Countries don't unilaterally abandon treaties that they've signed and surely they can figure out taxing a principal repayment is much different than taxing an interest or dividend payment." And, normally I would agree with that.


SJ

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