Trade and Taxes in a World with Borders

Examination of US corporate tax reform and impacts of a border adjustment tax within Global Macro Shifts.

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 ®

Hyung C. Shin, Ph.D. Senior Global Macro & Research Analyst,
Templeton Global Macro ®

Diego Valderrama, Ph.D. 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.

IMPORTANT LEGAL INFORMATION

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice.

The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. All investments involve risks, including possible loss of principal.

Data from third party sources may have been used in the preparation of this material and Franklin Templeton ("FT") has not independently verified, validated or audited such data. FT accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments opinions and analyses in the material is at the sole discretion of the user. ​

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