🇺🇸 Foreign Investment & US Tariffs: What’s at Stake?

Foreign investors hold a critical share of U.S. financial markets, with holdings reaching $39.8 trillion by December 2024—134% of U.S. GDP. A significant portion of this is in long-term securities, a vital pillar of the U.S. economy. However, the introduction of Section 899 could significantly disrupt this dynamic.

What Could Go Wrong?

  • If corporate bonds are taxed more heavily while Treasuries remain unaffected, credit spreads could widen sharply.

  • In this scenario, European debt might become more attractive compared to U.S. bonds.

  • A shift in Foreign Direct Investment (FDI) to Europe could further weaken demand for U.S. assets.

As the U.S. economy faces these pressures, capital costs for businesses could rise, weakening the USD and threatening financial stability.

For a deeper dive into the impact on foreign investments, visit:
Lean Research Insights on Trade Risks

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