• If enacted, the former president's threat to smack 100% tariffs on countries that "leave" the U.S. dollar would be a "lose-lose" situation for the U.S. and China, says GROW Investment Group's Hao Hong. 
• Earlier this year, Trump had floated the idea of imposing tariffs of 60% or more on all Chinese goods if he wins a second term.

Republican presidential nominee Donald Trump's threat to slap countries that shun the U.S. dollar with 100% tariffs is a "lose-lose" situation for both America and China, according to GROW Investment Group partner and chief economist Hao Hong. 

During a rally in Wisconsin on Saturday local time, the former president promised that he would push to keep the U.S. dollar as the world's reserve currency, if elected in November.

"Many countries are leaving the dollar. They not going to leave the dollar with me. I'll say, you leave the dollar, you're not doing business with the United States because we're going to put 100% tariff on your goods," he said.

The campaign promise is aimed at protecting the hegemony of the U.S. dollar in global financial markets and would present strong retaliation to those trying to unsettle it, Hong told CNBC's "Street Signs Asia" on Monday. 

"The U.S. dollar is a sort of privilege that the U.S. economy has been enjoying, and it's sort of a liquidity tax on the rest of the globe, so I'm not surprised to see this kind of threat," Hong said. 

The U.S. dollar remains dominant in global forex reserves even though its share in central banks' foreign exchange reserves has dropped from more than 70% in 1999, IMF data shows. Oil, a key commodity needed by every country is priced in the U.S. dollar.

In recent years, from Brazil to Southeast Asia, countries have been calling for trade to be conducted in currencies besides the greenback.

Regardless of the former president's rationale for the target tariffs, Hong expects such a move to be a  "lose-lose" situation for both Washington and it's biggest economic rival, Beijing.

"Because the Chinese export sector has been so competitive, it's been a driving force in lowering global inflation," Hong said.

"If you put a 100% tariff on Chinese exports, for example, one could only imagine how high the U.S. inflation is going to go," he said, adding that much of the U.S.'s trade deficit would shift to allies like Mexico and Canada.

Meanwhile, for China, such high tariffs would hurt its exports at a time when export growth is already stalling, and the country's manufacturing sector has been suffering from overcapacity, according to Hong. 

Early this year, Trump had already proposed increasing tariff rates on all China imports by 60% or more if he is elected, building on the U.S.-China trade war that was launched under his first term. Separately, he has said he would impose a blanket 10% tariff on all U.S. imports.

In July, economist Stephen Roach told CNBC's "Squawk Box Asia" that those China tariffs would "most assuredly" boost inflation for the U.S.

Speaking to CNBC's Squawk Box Asia at the end of last month, Andrew Tilton of Goldman Sachs said that Trump's proposed tariffs on China could knock 2% off Beijing's GDP.

- CNBC's Sonia Heng and Penny Chen contributed to this report