Morgan Stanley: Trump’s Tariff Letter May Signal a Tactical Escalation in Trade Negotiations

According to a report by Jinse Finance, Morgan Stanley economists state that U.S. trade negotiations are moving toward a tactical escalation. The bank's report notes that if the latest tariffs proposed in letters to trade partners by the Trump administration take effect, the weighted average tariff in Asia will rise to 27%. However, Trump has indicated that the U.S. is close to reaching an agreement with India. Morgan Stanley believes this suggests that most major Asian economies will be able to reach agreements before the August 1 deadline. However, Japan and South Korea may not be able to resolve key issues through negotiations. According to Morgan Stanley, these issues include Japan's auto tariffs and agricultural products, as well as South Korea's requests for tariff reductions on automobiles and steel. (Jin10)