Morgan Stanley analyzes three scenarios for tariff policy: Tariff policy remains a key variable in the market, and it is worth paying attention to on July 9

PANews reported on July 7 that Michael Zezas, head of global fixed income and thematic research at Morgan Stanley, released a research report pointing out that although the market generally expects that the US tariff policy will not escalate further, there are still many possibilities at the key node when the tariff suspension period expires on July 9, and investors need to be prepared for different situations.

Morgan Stanley analyzed three potential scenarios:

1. Extension strategy: The White House may extend the suspension period and announce agreements with some trading partners, while leaving open the possibility of raising tariffs on other countries. The EU and Japan are expected to maintain the current 10% base tariff rate.
2. Tactical escalation: If negotiations fail, the US may selectively re-impose tariffs and delay implementation to leave room for negotiations. The EU and Japan may face a tougher stance.
3. Mild case: The United States may announce regional or bilateral framework agreements indicating a propensity for lower tariff levels, reducing uncertainty about near-term import costs.

Morgan Stanley stressed that tariff policy remains a key variable in the market, and an aggressive tariff path could exacerbate the downside risks to the economic outlook and affect GDP growth expectations for 2025/2026. Investors need to pay close attention to this important date, July 9.