The proposed withholding tax for foreign investors in bonds by Trump’s economic chief could negatively affect both the U.S. dollar and the stock market by reducing demand for USTs, raising bond yields, and accelerating de-dollarization. The dollar might weaken modestly, and U.S. stocks could face a correction, particularly in growth sectors sensitive to rising interest rates. However, the dollar’s reserve status and the resilience of U.S. markets suggest that a catastrophic collapse is unlikely. The real risk lies in how foreign investors and global markets react—if they perceive this as a hostile move, the fallout could be more severe.