Morgan Stanley: Trump's tariff letter may signal a tactical escalation in trade negotiations

ChainCatcher news, according to Jinshi reports, Morgan Stanley economists say that the U.S. trade negotiations are moving towards a tactical escalation.

The report states 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 about to reach an agreement with India.

Morgan Stanley states that this suggests that most large Asian economies will be able to reach an agreement before the August 1 deadline. However, Japan and South Korea may not be able to resolve key issues through negotiations. Morgan Stanley mentions that these issues include Japan's auto tariffs and agricultural issues, as well as South Korea's tariff exemptions on automobiles and steel.