Morgan Stanley warns: Trump's tariffs will "substantially" hinder US economic growth by 2026.

Morgan Stanley's chief global economist, Seth Carpenter, said that the tariffs proposed by President-elect Trump would weaken US economic growth by 2026. Trump stated that he plans to impose a uniform tariff of 10% to 20% on all imported products, and an additional 60% to 100% tariff on goods imported from China. In the September presidential debate, he described this approach as a means of obtaining funds from competing countries. Another issue is when these tariffs will be implemented and how quickly. Carpenter stated that if these tariffs are implemented simultaneously, it could have a "huge negative impact" on the economy. Carpenter maintains Morgan Stanley's basic forecast that these tariffs will be phased in by 2025, leading to an increase in inflation. He warned: "By 2026, we believe that due to tariffs and some other policies, US economic growth will start to decline significantly." "It is obvious that tariffs raise inflation. It is clear that tariffs drag down US economic growth, not just those countries subject to tariffs." Mark Malek, Chief Information Officer of brokerage firm Siebert, pointed out that if the proposed tariffs, especially on top of the tariffs already imposed by the Biden administration, are imposed, inflation rates in industries such as automobiles, consumer electronics, machinery, construction, and retail will rise. Malek stated that Trump's proposal to impose a 60% tariff on Chinese goods, along with Biden's current 100% tariff on Chinese-made electric cars, will "seriously impact" the automotive industry, while a universal 10% tariff on imported consumer electronics will increase costs for companies like Tesla, Microsoft, and Apple. He added that these higher costs may be passed on to consumers. Despite a 2.6% year-on-year increase in the US consumer price index in October, slightly higher than September's 2.4%, US inflation has been falling in recent years, prompting the Federal Reserve to cut interest rates. Ben Emons, Chief Investment Officer and founder of FedWatch Advisors, said that if comprehensive tariffs are implemented, the market may completely rule out the possibility of rate cuts in 2025, adding that tariffs could also "restrain" economic growth.