Steven Dover "US tariff policy will remain even if administration changes… Dollar weakness is a normalization process"

Franklin Templeton Chief Market Strategist - Steven Dover

Excessive Chinese exports harm the global economy

Korea should move away from export-dependent structure

Reduce M7 investment in the US and diversify

"Even if the Democratic Party takes power in the United States, tariffs will not disappear."

Steven Dover, Franklin Templeton Chief Market Strategist (pictured), recently met with a reporter at his office in Manhattan, New York, and stated, "Even the left-wing supports some tariff policies." He further explained that the dollar's weakness following President Donald Trump's tariff policy is due to the dollar being overvalued after COVID-19, describing it as a "normalization process."

Dover is the Chief Market Strategist and Head of Strategy Research at Franklin Templeton, one of the top leaders in establishing the overall investment strategy for Franklin Templeton. During this meeting, Dover shared various opinions on Trump's tariffs, the value of the dollar, and the Magnificent 7 (M7) investment strategy.

He explained, "What President Trump ultimately wants to achieve through tariffs is a change in the structure of the US economy itself," adding that "he wants to shift the US economy from being consumption-centered to investment-centered." Currently, 70% of the US Gross Domestic Product (GDP) is accounted for by the consumption sector, and there is an intention to reduce the consumption share and increase the production share.

Dover stated that targeting China in the trade war by President Trump was already anticipated. He pointed out, "China has a small consumption share and is export-centered," and "the dollar's value is too high compared to economic fundamentals, and China's excessive exports are harming the global economy." He explained that structural changes were inevitable, but President Trump accelerated them rapidly and all at once, which is problematic.

Dover emphasized that "there is no one in the Trump administration who considers Korea an adversary," highlighting that the starting point for trade negotiations with China is fundamentally different. However, he advised that Korea, like China, should increase consumption to expand the domestic market. He noted that in a world where protectionism is strengthening, it is difficult to survive with an export-dependent economic structure.

Regarding whether President Trump is ready to abandon the strong dollar policy maintained by past US administrations to resolve the trade deficit, he analyzed that "some members of the economic team prefer a weaker dollar." He added, "The dollar is currently overvalued," and "the dollar's value could fall by 10-20%."

Dover advised Korean individual investors that "the M7 share is too high," and suggested "continuing to invest in the US market but diversifying the portfolio."

New York = Park Shin-young, Correspondent nyusos@hankyung.com