Goldman Sachs warns: The U.S. benchmark tariff rate may jump to 15%, pushing inflation up to 3.3%
Goldman Sachs Group predicts that the U.S. benchmark tariff rate will increase from 10% to 15%, which may exacerbate inflationary pressures and suppress economic growth. Core inflation is expected to be revised up to 3.3% in 2025, while GDP growth is revised down to 1%. The drag effect of tariffs on economic growth is expected to be 1 percentage point in 2025, 0.4 percentage points in 2026, and 0.3 percentage points in 2027. Overall, inflation risks are on the rise, while growth risks are on the decline
According to the latest predictions from Goldman Sachs economists, the U.S. benchmark "equivalent" tariff rate is expected to rise from 10% to 15%, with copper and key minerals facing a special tariff of 50%—a move that could exacerbate inflationary pressures and suppress economic growth.
David Mericle, the bank's Chief U.S. Economist, noted in a weekly research report that the forecasts for U.S. inflation and GDP growth have been adjusted to reflect the new tariff assumptions and incorporate the "early experiences" of import taxation impacts.
"Current major experiences indicate that the transmission of tariffs to consumer prices is slightly lower than the levels seen in 2019," Mericle analyzed, "While it is still early to assess the transmission effects, surveys of corporate pricing intentions also suggest that this transmission is weaker than last time."
Based on this, Goldman Sachs has lowered its core inflation forecast for 2025 from 3.4% to 3.3%, raised its expectation for 2026 from 2.6% to 2.7%, and increased its forecast for 2027 from 2.0% to 2.4%. Mericle stated that cumulatively, tariffs are expected to push core prices up by 1.7% over the next 2-3 years.
The drag effect of tariffs on economic growth is expected to be: 1 percentage point in 2025, 0.4 percentage points in 2026, and 0.3 percentage points in 2027. In light of this, Goldman Sachs has lowered its GDP growth forecast for 2025 to 1%. The bank also anticipates that industry-specific tariffs will be implemented for heavy trucks and aircraft in 2026, while the increase in tariffs on pharmaceutical products may be postponed until after the 2026 midterm elections.
Mericle pointed out that, on a weighted average basis, the actual tariff rate in the U.S. is expected to rise by 16 percentage points this year. "This implies that inflation risks are slightly tilted to the upside, while growth risks are somewhat tilted to the downside," he wrote in a report to clients
