Deutsche Bank Warns US ’Revenge Tax’ Could Trigger Capital War, Erode Investor Appeal

Deutsche Bank analysts sound the alarm on a controversial US tax provision targeting foreign investors. Section 899 introduces higher levies on passive income and could serve as an economic weapon, with George Saravelos warning it may transform trade tensions into capital wars.

The legislation arrives as foreign confidence in US markets already wavers following Trump’s tariff policies. While courts recently constrained presidential trade powers, this tax mechanism provides alternative leverage—requiring minimal justification for implementation.

Wall Street fears compounding damage to America’s investment appeal. The MOVE risks accelerating capital flight at a precarious moment for dollar dominance, with digital assets poised to benefit from deteriorating traditional market conditions.