Morgan Stanley has outlined potential effects of reciprocal tariffs set to be announced this Wednesday on various sectors, encompassing everything from car manufacturers to brands in the footwear industry. The analysts forecast that the U.S. may hike import taxes by an additional 10% on merchandise from China and impose tariffs on specific goods from Europe and Asia, including Vietnam as per a memo released this Monday.
They also foresee a potential relaxation of tariffs on goods imported from Mexico and Canada, which could result in a heavier import tax impact on certain specific sectors. Despite the exact route towards implementation being unknown at this stage, especially in terms of tariff levels, products, and geographies, the analysts advise that one thing is abundantly clear – tariffs are set to increase and companies should anticipate and prepare for this to mitigate any potential adverse effects.
Industries involved in imports of automobiles, footwear, and apparel may find the transition most challenging as they have a limited capacity to elevate prices without negatively affecting demand.