Trump's Tariffs: Impact on Markets and Economic Projections
Following the implementation of tariffs on Canada, Mexico, and China, Wall Street analysts and economists have provided insights on the potential consequences for markets and the economy.
Morgan Stanley Public Policy Research Team
* Recession in Mexico expected.
* US inflation potentially 0.3%-0.6% higher.
* US growth could decline by 0.7%-1.1%.
* Demand drag similar to China's 2018-19 tariffs.
* Impact on US Treasury duration, US Dollar strength, and equity performance.
EvercoreISI Economics Team
* US growth likely to suffer due to decreased exports, investment, and employment.
* Federal receipts expected to increase.
* Estimated 40 basis point increase in inflation and drag on growth.
EvercoreISI China Strategist Neo Wang
* Timing of tariffs likely offended China due to Chinese New Year holiday.
* Tariffs coincide with God of Wealth worship day, considered auspicious.
* Tariffs aimed at gaining leverage in TikTok negotiations or forcing Beijing to the table.
JP Morgan Metals & Mining Analyst Bill Peterson
* Financial risk to Alcoa (AA), GrafTech International (EAF), and Cleveland Cliffs (CLF) identified.
* Canada exposure and exports impact Alcoa and EAF.
* US electrode pricing increase could restart GrafTech's St. Mary's facility.
* Risk to CLF from Canadian exposure.
22V Research Strategist Michael Hirson
* Beijing likely to impose symbolic tariff increases on US imports.
* Informal retaliation from China expected to be limited.
* Beijing may take actions to address fentanyl concerns.
* Additional tariffs on China imports beyond the initial 10% remain a possibility.
* US-China trade deal seen as unlikely in the short term.
These insights from Wall Street analysts provide a comprehensive perspective on the potential economic and market impact of President Trump's tariffs.