Destination-Based Tax Could Trigger Market Sell-Off: Goldman Sachs

Goldman Sachs has warned of a market sell-off if Congress passes a Republican proposal to shift to destination-based tax – based on where the goods and services are sold, rather than the place of their origin.

“Whatever the merits of the proposed legislation, we think markets would treat it as an escalation of trade tensions between the U.S. and the rest of the world,” the bank said in a research note Dec. 20.

The bank also said such a would substantially weaken the Chinese renminbi and the Korean won against the dollar, adding to concerns over supply chain disruptions, and affecting investor sentiment in a potential risk-off environment.

Such...