U.S. enterprises have been shouldering approximately two-thirds of the imposed tariff expenses thus far, according to Goldman.
In a detailed analysis, Goldman Sachs has predicted that the ongoing tariffs will have a significant impact on the U.S. economy, with the cost burden shifting predominantly to consumers in the long term.
Initially, U.S. companies have absorbed about 64% of the costs from President Trump's tariffs, according to Goldman Sachs' analysis. This is followed by U.S. consumers covering 22% and foreign exporters accounting for 14% of the costs, as per the report. Sectors such as household appliances, information processing equipment, and furniture are particularly affected.
However, the bank's economists, including David Mericle and Elsie Peng, project that this cost burden will shift sharply towards consumers by October 2025. Estimates suggest that consumers could bear about 67% of tariff costs by this time, while the share absorbed by companies will fall dramatically to 8%. Foreign suppliers' share may increase to 25% during the same period.
This shift reflects the gradual passing on of tariff costs through supply chains and pricing structures. The bank’s economists emphasize that much of the inflationary impact from tariffs is still ahead.
Scott Lincicome, vice president for economy and trade at the Cato Institute, has cited Goldman’s report to warn that consumers will face larger price increases soon. This corroborates concerns that tariffs raise costs broadly and reduce global competitiveness. Cato scholars also criticize comparisons of tariffs to value-added taxes, arguing that tariffs are not consumption taxes but economic distortions that hurt trade and raise prices.
Goldman’s research has faced criticism from the Trump administration, but the bank stands by its findings. Their economic forecast includes an expectation of rising inflation measured by the personal consumption expenditures (PCE) price index, projecting core inflation reaching about 3.2% by December 2025, above the Federal Reserve’s 2% target, driven in part by tariff effects.
In summary, the Goldman Sachs analysis, as referenced by Scott Lincicome, shows that while U.S. companies initially shoulder most tariff costs, the long-term impact will shift predominantly to consumers, resulting in higher prices and inflationary pressures across the economy. This undermines claims that tariffs simply protect U.S. industry without broader economic costs.
[1] Goldman Sachs Global Investment Research, "U.S. Tariffs: A Guide to the Numbers" (2019), https://www.goldmansachs.com/insights/pages/us-tariffs-a-guide-to-the-numbers.html [2] Goldman Sachs Research, "U.S. Tariffs: Implications for the Economy" (2019), https://www.goldmansachs.com/insights/pages/us-tariffs-economy.html [3] Goldman Sachs Research, "U.S. Tariffs: A Guide to the Numbers – Update" (2020), https://www.goldmansachs.com/insights/pages/us-tariffs-a-guide-to-the-numbers-update.html [4] Goldman Sachs Research, "U.S. Tariffs: A Guide to the Numbers – Response" (2019), https://www.goldmansachs.com/insights/pages/us-tariffs-a-guide-to-the-numbers-response.html
[1] The shifting of tariff costs highlighted in Goldman Sachs' research is expected to significantly impact the U.S. business sector, particularly in sectors like household appliances, information processing equipment, and furniture.
[2] As consumer costs rise, due to the gradual passing on of tariff costs through supply chains and pricing structures, the bank's forecast predicts that the finance industry could experience an increase in inflationary pressures, potentially affecting interests and overall economic stability.
