Trump's contentious new policy imposes a 90-day ban on entrance into the U.S. for individuals from seven Muslim-majority countries. He strongly defended his move on Sunday, saying that that while America was "a proud nation" of immigrants, his order was strictly about national security and not religion.

"Anyone with any brains" who was previously dovish about U.S. assets will now reconsider the U.S. as a safe haven under new fears that Trump's protectionist policies could see them lose access, Faber said Monday.

U.S. assets are set to suffer in the long run as investors consider the "psychological" impacts of President Donald Trump's travel ban, , the publisher of the Gloom, Boom & Doom report, has told CNBC.

But, according to Faber - who is often known as "Dr. Doom" for his usually pessimistic views - the repercussions are likely to be long term.

"I think this travel ban, psychologically, will have a very negative impact in the long run on the U.S. dollar and U.S. assets."

Faber referred to the U.S.'s large trade and current account deficits and said that going forward investors are likely to look less favorably on the U.S. which has hereto experienced a market rally since Trump's election in November. On Wednesday, the .

Calling 2017 "the year of disappointments", Faber is countering market consensus and said that investors should be short U.S. dollar and U.S. stocks and long emerging markets.

"As we go into 2017, the consensus is that inflation will go up … And you want to be overweight U.S. stocks … but protectionism, I guarantee you, is not going to be good for the U.S."

-CNBC's Javier David contributed to this report.