Morgan Stanley Analyzes Tariff Policies: 3 Scenarios to Watch on July 9th

Morgan Stanley's Global Head of Fixed Income and Thematic Research, Michael Zezas, released a report stating that while the market generally expects no further escalation of US tariff policies, the key deadline of the tariff suspension on July 9th still presents various possibilities. Investors need to prepare for different scenarios. Morgan Stanley analyzed three potential situations: Extension Strategy: The White House may extend the suspension period, announce agreements with some trading partners, while keeping the possibility of increasing tariffs on other countries. The EU and Japan are expected to maintain the current 10% baseline tariff. Tactical Escalation: If negotiations fail, the US may selectively reimpose tariffs and delay implementation to leave room for negotiations. The EU and Japan may face a tougher stance. Mild Scenario: The US may announce regional or bilateral framework agreements, indicating a tendency to lower tariff levels, reducing uncertainty in short-term import costs. Morgan Stanley emphasizes that tariff policies remain a key market variable, with an aggressive tariff path potentially exacerbating downside economic risks and affecting GDP growth expectations for 2025/2026. Investors need to closely monitor this important date on July 9th.

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