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TEMPLETON GLOBAL MACRO®

This edition of Global Macro Shifts examines US corporate tax reform and the potential impacts of a border adjustment tax (BAT). Templeton Global Macro reviews how a BAT would work, its likely effect on prices and exchange rates, its implications for the longer-term macroeconomic outlook, its impact on different domestic sectors and trade flows, and the potential ramifications for international trade relations.

How a Border Adjustment Tax (BAT) Would Work

The potential for US corporate tax reform and a BAT has recently sitrred debate. Dr Michal Hasenstab reviews how a BAT would work and its likely impact to global markets

US Consumption Tax Implications

The proposed tax reforms could have broad implications across the US economy. Dr. Hasenstab reveals which sectors stand to benefit and which may suffer.

Global Implications of US Import Taxes

Dr. Hasenstab explains the potential ramifications for international trade relations if a BAT would be implemented.

Impact of Potential US Tax Changes on Emerging Markets

What do the potential policy changes in the US mean for emerging markets? Dr. Hasenstab offers his assessment on where he sees investment opportunities in the context of global trade.

Contributors

Michael Hasenstab, Ph.D.

Portfolio Manager, Chief Investment Officer, Templeton Global Macro®

Sonal Desai, Ph.D.

Portfolio Manager, Director of Research, Templeton Global Macro ®

Calvin Ho, Ph.D.

Deputy Director of Research, Templeton Global Macro ®

Diego Valderrama, Ph.D.

Vice President, Senior Global Macro & Research Analyst, Templeton Global Macro®

Attila Korpos, Ph.D.

Senior Global Macro & Research Analyst, Templeton Global Macro®

Shlomi Kramer, Ph.D.

Senior Global Macro & Research Analyst, Templeton Global Macro ®

What Are the Risks?

All investments involve risks, including possible loss of principal. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in an investment portfolio adjust to a rise in interest rates, the value of the portfolio may decline. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets, of which frontier markets are a subset, involve heightened risks related to the same factors, in addition to those associated with these markets' smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets.

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