Analysts Warn Market Is Ignoring Impact of Existing Tariffs on Margins and Economic Growth

Some market analysts say investors are underestimating the risks from existing tariffs, according to Bloomberg. Average U.S. import duties have surged to over 13%, up fivefold from last year, reducing profit growth by 5% or more and adding pressure to the broader economy. As Trump ramps up new tariffs, companies such as General Mills, Oxford Industries, and FedEx are already slashing their forecasts. Morgan Stanley’s Mike Wilson sees a near-term 5 to 10% correction as margin compression sets in, even as he maintains a bullish long-term outlook. Broader risks loom, with Bloomberg Economics estimating tariffs could shrink the U.S. economy by 1.6% over the next three years and raise prices 0.9%. Persistent or rising inflation could prevent interest-rate cuts this year, undermining investor expectations.