Trump’s Proposed Digital Tax Could Trigger Market Turmoil, Analysts Warn

Former President Trump’s push to tax nations imposing digital service levies on US tech companies has sent shockwaves through financial circles. Section 899 of recent legislation—passed by the House in May—threatens to upend global capital flows, with Allianz chief economist Ludovic Subran predicting a 5% dollar slump and 10% equity market decline if implemented.

Wall Street consensus suggests the measure WOULD compound existing foreign investor anxieties. Already rattled by unpredictable trade policies and deteriorating US fiscal health, international holders of $31 trillion in American securities may view this as the final straw. "This is the exact thing people don’t focus enough on," Subran cautioned during a June 3 interview, describing the provision as a potential "big scary moment" for markets.

The proposed rule would hike taxes on entities from countries deemed to have discriminatory tax policies. Subran’s modeling anticipates half-point yield spikes on Treasuries alongside the currency and equity drops—a triple threat that could accelerate capital flight from traditional dollar assets into alternative stores of value.