Mubasher: Morgan Stanley asked investors to prepare for at least a temporary implementation of duties on imported cars before this summer.

Despite the US bank’s strategists Michael Zezas and Meredith Pickett projected in a note that any tariffs to be levied temporarily, the move would create pressure on the short term “on economic fundamentals and investor sentiment,” Bloomberg said.

Prices for both new and second-hand vehicles would surge, while car dealerships would see their employment shrinking and revenues declining, Zezas and Pickett said, citing a July report from Center for Automotive Research.

While any tariffs to be rolled back quickly, they could be levied by this summer, Morgan Stanley analysts said.

It is worth noting that US Commerce Secretary Wilbur Ross is set to submit on 17 February to President Donald Trump a report on an investigation examining the impact of imports of automobiles and car components on the American national security.

President Trump threatened to slap a tariff of up to 25%, especially on vehicles imported from the European Union (EU).

However, Trump vowed to refrain from imposing new duties on cars imported from the EU, while both sides try to clinch a broader trade deal.

On a broader level, the US lender’s strategists do not expect the US-China trade tariffs to be hiked in the 2 March deadline.

On a side note, Goldman Sachs analysts warned investors to prepare for the possibility of tariffs.