Goldman Sachs Warns of Economic Slowdown If Trump Returns to the White House

Goldman Sachs analysts are cautioning that former President Donald Trump's potential return to office could lead to slower economic growth if he enacts his proposed policies.

According to Goldman Sachs, Trump's plans to tighten immigration restrictions and impose new tariffs on Chinese imports could reduce GDP growth by half a percentage point in the latter half of 2025. 

Negative Impact of Tariffs and Immigration Policies

Goldman Sachs noted that Trump's policy proposals would likely result in a greater negative impact on economic growth compared to any positive effects from fiscal measures.

“We estimate that whether Trump wins with a sweep or under a divided government, the detrimental effect of tariffs and stricter immigration policies would outweigh the positive fiscal stimulus,” the analysts wrote in a note released Tuesday.

A Trump win would likely lead to increased tariffs on auto imports from China, Mexico and the European Union that would raise core inflation, Goldman says.

Goldman Sachs Positive Forecast for a Harris Presidency

In contrast, Goldman Sachs forecasts a more favorable economic outcome under a Harris presidency with Democratic control of Congress. They argue that spending initiatives and tax credits would “more than offset” the potential impact on investment from an increased corporate income tax rate.

Goldman Sachs also predicts that if Harris wins the presidency but Congress remains divided, any policy changes would likely be minimal and have a neutral effect on GDP.

Under Harris, Goldman estimates that job growth would be 10,000 a month higher than if Trump wins, and 30,000 higher than with a Republican sweep.

Joseph Costello, a spokesperson for the Harris-Walz campaign, emphasized Vice President Harris’s commitment to economic growth. 

“Vice President Harris has a positive vision for strengthening the economy by supporting the middle class, cutting taxes, lowering costs for families and small businesses, and creating opportunities for all Americans,” Costello said in a statement. “On the economy, the choice this November is clear.”