Goldman Sachs Raises 2025 Tariff Expectations by 15% – Coincu

Goldman Sachs has revisited its US tariff expectations for 2025, increasing predictions to a 15% rise in a recent report.

The investment bank’s updated forecast could impact economic growth and core inflation, raising concerns in financial markets.

Goldman Sachs Predicts 15% Tariff Hike by 2025

Goldman Sachs, in a research report, revealed that 2025 US tariffs are now expected to increase by 15 percentage points. This change stems from announced “reciprocal tariffs” by former President Trump aimed at US trading partners.

Economic implications include a slowdown in GDP growth and increased inflation rates. Goldman’s analysis anticipates a GDP growth decline to 1% and core PCE inflation to rise to 3.5%, complicating economic recovery efforts.

“We are raising the probability of a U.S. recession to 35%, up from 20% a year ago, as tariff risks have become considerably more adverse.” – Jan Hatzius, Chief Economist, Goldman Sachs

Recession predictions now stand at 35% within the next year, sparked by weak consumer and business sentiments. Goldman Sachs suggests this economic pain arises from policy adjustments impacting broader economic goals.

Tariff Impact: Slow Growth and Rising Inflation

Did you know? In the early 2000s, the US increased tariffs significantly, impacting global trade patterns for years and contributing to shifts in both political and economic policies worldwide.

The historical context of previous tariff adjustments has often led to domestic economic impacts. The anticipated changes in tariffs could lead to shifts in employment rates, as reflected in Goldman’s projection of an increase in unemployment to 4.5% by 2025.

Historical data suggests that rising tariffs often slow economic growth, as evidenced by past economic downturns following similar events. This leaves businesses and policymakers anticipating potential policy shifts and economic recalibrations.