Goldman Sachs sees Trump’s baseline tariff rate rising to 15%
The investment bank expects sectoral tariffs on heavy trucks and aircraft in 2026 as well as a delayed increase in tariffs on pharmaceuticals after the 2026 midterm elections
[SYDNEY] Economists at Goldman Sachs expect the US baseline “reciprocal” tariff rate will rise from 10 to 15 per cent, with a 50 per cent levy on copper and critical minerals, an outcome that threatens to fuel inflation and weigh on economic growth.
The investment bank also revised forecasts for US inflation and gross domestic product growth to reflect the new tariff assumption and to factor in “early lessons” about the impact of the import levies, chief US economist David Mericle wrote in a weekly update.
“The main lesson about tariffs so far is that passthrough to consumer prices is tracking somewhat lower than in 2019,” Mericle wrote. “While it is still very early to estimate passthrough, surveys that ask businesses how much they intend to raise prices eventually also indicate lower passthrough than last time.”
As a result, Goldman now forecasts core inflation of 3.3 per cent in 2025 from a year ago, compared to a previous estimate of 3.4 per cent. The rate will slow to 2.7 per cent next year and then 2.4 per cent in 2027, both higher than previous estimates of 2.6 per cent and 2 per cent. Cumulatively, tariffs are seen boosting core prices by 1.7 per cent over two to three years, Mericle said.
Tariffs will weigh on GDP growth by one percentage point this year, 0.4 point in 2026 and 0.3 point in 2027, he added. As a result, Goldman now forecasts 1 per cent GDP growth in 2025.
Goldman expects sectoral tariffs on heavy trucks and aircraft in 2026 as well as a delayed increase in tariffs on pharmaceuticals after the 2026 midterm elections.
On a weighted-average basis, the US effective tariff rate is now assumed to rise by 16 percentage points this year, Mericle said.
“This implies that the tariff risks to inflation are tilted slightly to the upside and the risks to growth are tilted slightly to the downside,” he wrote in the note to clients. BLOOMBERG
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