US tariffs

Morgan Stanley warns of impact of Trump tariffs

By Albertocrypto | Cripto tips | 20 Nov 2024


Donald Trump's proposal to impose tariffs could hurt US economic growth through 2026, according to Seth Carpenter, chief economist at Morgan Stanley. Below, we analyze the possible impacts of this measure.

Trump's Proposed Tariffs


Trump plans a general tariff of between 10% and 20% on all imports. In addition, it contemplates additional tariffs of between 60% and 100% for products from China. During a debate in September, he argued that this strategy would serve to raise funds from competing countries.

Immediate Effects on the Economy


Seth Carpenter warned that if these tariffs are applied immediately, they could have a strong negative impact on the economy. According to Morgan Stanley's base case, these tariffs could be implemented gradually through 2025, which would still lead to significant consequences:

Inflation: "It is clear that tariffs increase inflation," Carpenter said.

Economic Growth: "By 2026, growth in the United States will be markedly reduced due to these policies," he added.


Most Affected Sectors


Mark Malek, chief investment officer at Siebert, noted that several sectors would be hit hardest if these tariffs are imposed:

Automotive: A 60% tariff on Chinese products, added to the current 100% on electric vehicles, would seriously harm this industry.

Consumer Electronics: A 10% tariff on imports would increase costs for companies like Tesla, Microsoft and Apple, which would likely pass these costs on to consumers.

Other Sectors: Construction, machinery and retail trade would also face higher prices due to increased costs.
Relationship with Inflation and Interest Rates
Although inflation in the United States has decreased in recent years, standing at 2.6% in October, these tariffs could reverse this trend. Ben Emons, founder of FedWatch Advisors, warned that if these measures are implemented, the market could rule out interest rate cuts by 2025. "Tariffs would also limit economic growth," he said.

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Albertocrypto
Albertocrypto

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