Morgan Stanley Chief Global Economist Seth Carpenter Talks Tariffs
Feb 3, 2025
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Seth Carpenter, Chief Global Economist at Morgan Stanley, dives deep into the long-term effects of tariffs initiated by the Trump Administration on Canada and Mexico. He discusses the economic uncertainty faced by businesses and consumers. Carpenter highlights the impact of these tariffs on employment and consumer spending, emphasizing risks in manufacturing. Furthermore, he analyzes how tariffs affect global trade, particularly in agriculture and apparel, and the potential recession risks for Mexico amid fluctuating currency and inflation.
The long-term impact of Trump Administration tariffs could lead to a notable decrease in U.S. economic growth and investment uncertainty.
Proposed tariffs could trigger significant repercussions for economic partners like Mexico, potentially pushing its economy towards recession due to trade interdependencies.
Deep dives
Open Source AI and Healthcare Innovation
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Economic Outlook Amid Tariff Uncertainty
The discussion explores the potential impacts of proposed tariffs on economic growth, particularly focusing on different scenarios regarding their implementation and duration. Economists highlight that if tariffs are fully enforced, the U.S. could experience a decrease in growth by at least one percentage point, complicating already strong economic conditions. The uncertainty these tariffs introduce plays a significant role in corporate behavior, with businesses potentially delaying investments due to unclear economic forecasts. This uncertainty could lead to significant ramifications across various sectors, as firms navigate their strategies amid changing trade dynamics.
Global Repercussions of Tariffs
The potential ramifications of U.S. tariffs extend beyond American borders, significantly affecting economic partners like Mexico and China. Economic analysts predict that Mexico may face a recession if tariffs are imposed, largely due to the intertwined nature of global trade and economic dependency. In contrast, the U.S. economy, while affected, may not regress into recession due to a strong economic foundation; however, consumer spending could notably decline. The interconnectedness of global economies implies that disruptions in one region can ripple through others, affecting various industries, from manufacturing to services, underscoring the importance of navigating these trade tensions thoughtfully.
Morgan Stanley Chief Global Economist Seth Carpenter discusses the long term impact of Trump Administration tariffs on Canada and Mexico. He speaks with Bloomberg's Alix Steel and Romaine Bostick.