Bloomberg Talks Morgan Stanley's Mike Wilson Talks Tariff Impact in Q3
Jul 17, 2025
Mike Wilson, Chief US equity strategist at Morgan Stanley, shares insights on potential market corrections amid tariff impacts. He notes a likely correction of only 5% to 10% as companies adapt to challenges. The discussion delves into the nuances of tariffs, including the shift towards a consumption tax model. Wilson also explores how legislation affects corporate investments, along with the transformative role of AI in the workforce. He highlights the balance between productivity and employment amidst evolving economic dynamics.
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Moderate Market Impact from Tariffs
- Tariffs have caused a market test but only triggered a moderate 5-10% correction so far.
- The third quarter is critical as tariff costs start impacting corporate earnings and prices.
Tariff Complexity and Impact
- Many tariffs have exemptions and carve-outs, complicating their full effect on costs.
- The goal may be a consistent ~10% import tax, which companies can manage effectively.
Tax Shift Fuels Private Capital
- The tax cuts offset import taxes by shifting the tax burden to importers and consumers.
- This changes capital allocation from government-directed to privately-driven markets.