Trump’s tariffs may be bringing in a lot of revenue but they’ve also been a ‘tax on capital, so far,’ top economist says

President Trump’s tariffs, highly touted as a lever to boost American industry, are now emerging as a substantial tax on business—putting pressure on corporate profits, labor markets, and prices, according to Morgan Stanley’s chief economist. Michael Gapen draws a striking conclusion in his Monday research note, US Economics Weekly: “Tariffs have been a tax on capital, so far.” In the second quarter of 2025, U.S. corporations largely absorbed the escalating cost of tariffs, according to Gapen’s team, offs ...