Morgan Stanley: Tariffs in the coming months will cause U.S. prices to rise by about 1 percentage point.

The May import data from the United States shows that the actual tariff rate is 8.3%, much lower than the 10% to 15% level predicted by Morgan Stanley. However, it is anticipated that the rates will trend towards the predicted values in June and July. Transportation delays, higher than expected imports from Mexico and Canada under the USMCA agreement, and a significant decrease in imports from emerging markets are the main reasons for the actual tariff rates being lower than expected. As the data for June and July may show an increase in effective tariff rates, the transmission effect on US inflation will become more pronounced. Historically, the actual impact of tariffs on consumer prices usually becomes evident 3 to 5 months after implementation, with the ripple effects on economic growth appearing after 3 months. Morgan Stanley expects that tariffs in the coming months may cause prices to rise by about 1 percentage point, which will gradually diminish as demand weakens.