Trump's proposed tariffs on Mexico, Canada, China will increase inflation, Goldman Sachs warns

Published On Nov 27, 2024, 1:32 PM

Goldman Sachs has warned that President Trump's proposed tariffs on Mexico, Canada, and China could drive inflation up by nearly 1%. The tariffs would apply to 43% of U.S. imports, potentially pushing core personal consumption expenditures prices higher. This is significant as the Federal Reserve uses the PCE index to assess inflation. Economists estimate that for every 1% increase in tariff rates, the core PCE would increase by 0.1%. This scenario raises concerns for consumers who might see higher costs starting from Trump's anticipated inauguration day.

Read full article

Stock Forecasts

XLPView XLP chart on TradingView

Negative

The announcement of these tariffs is likely to increase costs for consumers due to higher prices on imported goods. Particularly affected industries include consumer goods, retail, and sectors reliant on raw materials from these countries. This situation could dampen consumer spending as higher prices lead to an increase in inflation, slowing down economic growth. Overall, these factors are expected to negatively impact the stock prices of companies heavily reliant on imports from these regions.

Related News

Republicans Ponder: What if the Trump Tax Cuts Cost Nothing?

Nov 23, 2024, 5:03 AM

Some in the party are considering alternative ways of assessing the federal budget as they prepare to extend temporary tax cuts passed in 2017.

XLY
XLP

Impending recession is 'boiling up from the bottom,' chief economist warns | Fox Business Video

First Trust Advisors chief economist Brian Wesbury on tight consumer credit conditions, the state of the stock market and how Trump's Cabinet picks will impact the macroeconomy.

XLP
XLY

UK inflation: Four things the latest figures tell us

Nov 20, 2024, 8:03 AM

The inflation rate has risen, putting pressure on people's finances and casting doubt on interest rate cuts.

XLP
ICLN
XLY