Goldman Sachs has revisited its US tariff expectations for 2025, increasing predictions to a 15% rise.
Goldman Sachs Predicts 15% Tariff Hike by 2025
In a research report, Goldman Sachs revealed that US tariffs in 2025 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.
Tariff Impact: Slow Growth and Rising Inflation
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.
Historical Context and Potential Consequences
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. 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.
The anticipated tariff changes could significantly impact US economic indicators, requiring businesses and government to prepare for the potential consequences.
