Tariffs push U.S. tax rates to post-WWII highs, yet USD paradoxically strengthens – Seymour

[Money finance growth chart stock market with dollar moving down]
hudiemm/iStock via Getty Images

New tariff policies under consideration could push effective tax rates higher than they’ve been since after World War II, according to Tim Seymour, CIO of Seymour Asset Management.

In an interview with CNBC, Seymour expressed concern about the potential for rates to “get a lot worse” as trade tensions escalate globally.

Despite these tariff pressures, Seymour noted a surprising trend in currency markets.

“It’s fascinating, if anything,” he said. “I would think that these dynamics, in terms of a pure theory around deficits and collecting tariffs…would possibly improve here. The reality is [that the dollar is] somewhat weaker, and I think the trend on the weaker dollar remains.”

He also noted that current dollar (DXY [https://seekingalpha.com/symbol/DXY]) movements aren’t necessarily driven by foreign entities abandoning U.S. assets. “I don’t think you’ve seen an outright sale of U.S. assets and an outright sale of owning the U.S., but I think there has been positioning to at least hedge against that,” rather than fundamental shifts in confidence.

For investors focused on global markets, Seymour believes the tariff headlines don’t fundamentally change investment strategies. He emphasized that “the tariff profile of the rest of the world will continue to evolve over the next couple of days,” creating some short-term market volatility without altering the underlying investment thesis for international exposure.

Emerging markets (NYSEARCA:EEM [https://seekingalpha.com/symbol/EEM]) in particular have seen significant inflows recently, with Seymour highlighting “$5.5B of inflow into EM equity (NYSEARCA:EEM [https://seekingalpha.com/symbol/EEM])” in just the previous week.

This surge follows 15 years of underperformance and fund outflows, suggesting a potential longer-term shift in investor sentiment that Seymour expects to continue despite tariff uncertainties.

He also said China technology (CQQQ [https://seekingalpha.com/symbol/CQQQ]), (KGRN [https://seekingalpha.com/symbol/KGRN]), (TCHI [https://seekingalpha.com/symbol/TCHI]) remains “very attractive,” as well as the Latin America resource trade around copper, oil and ore.

MORE ON US DOLLAR INDEX:

* Weekly Commentary: Big, Ugly Crisis Of Confidence [https://seekingalpha.com/article/4799712-weekly-commentary-big-ugly-crisis-of-confidence]
* U.S. Dollar Extends Recovery; Tariffs Loom But Now On August 1 [https://seekingalpha.com/article/4799630-us-dollar-extends-recovery-tariffs-loom-but-now-august-1]
* Weekly Market Pulse: The Crossroads [https://seekingalpha.com/article/4799572-weekly-market-pulse-the-crossroads]
* Trump puts 25% tariff on Japan and South Korea [https://seekingalpha.com/news/4465658-trump-puts-25-percent-tariff-on-japan-and-south-korea]
* Dollar inches higher ahead of Trump’s trade deadline-Currency Recap [https://seekingalpha.com/news/4465640-dollar-inches-higher-ahead-of-trumps-trade-deadline-currency-recap]