Goldman sees US GDP hit if Trump wins, boost if Democrats sweep
Goldman Sachs Group Inc. economists gamed out the potential economic implications of a Republican or Democratic victory in the November elections, cautioning that US GDP faces a hit in the case of a win for Donald Trump.
“We estimate that if Trump wins in a sweep or with divided government, the hit to growth from tariffs and tighter immigration policy would outweigh the positive fiscal impulse” from maintaining most tax cuts, Goldman economists including Alec Phillips wrote in a note Tuesday.
Gross domestic product would see a peak hit of 0.5 percentage point in the second half of next year in that scenario, with the effects abating in 2026, the Goldman team estimated. They assumed a 20 percentage-point hike in China tariffs under Trump, along with higher duties on auto imports from Mexico and the European Union, and a reduction in immigration that would slow growth in the labor force.
Should Vice President Kamala Harris win and Democrats secure control of both chambers of Congress, “new spending and expanded middle-income tax credits would slightly more than offset lower investment due to higher corporate tax rates,” the Goldman economists wrote. That would result in “a very slight boost to GDP growth on average over 2025-2026.”
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If Harris won the White House in a divided-government scenario, where Republicans control at least one chamber of Congress, “the effects of policy changes would be small and neutral on net,” Phillips and his
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