Trump tariffs could cost US economy hundreds of thousands of jobs: Goldman Sachs

A new report issued by Goldman Sachs is studying how president Donald Trump’s tariff will affect the labor market, which was found that although this may stimulate employment in manufacturing, job losses in other industries affected by tariffs will lead to a negative impact on employment throughout the economy.

Economists in Goldman Sachs have reviewed the leadership of Yan Hatzius historical and academic studies on the impact of customs tariffs on the labor market in the industries protected by the definitions and the estuary industries that depend on the imports of customs tariffs.

Economists said: “Some studies have found examples that customs tariffs may be effective when applied to emerging industries, or products with high flexibility to demand in particular, or products with a lower scope of cost effects on estuary industries,” Economists said. “However, the existing broad definitions offered by the Trump administration do not target these types of industries and products.”

The report indicated that the Trump administration plans to raise the actual US tariff rate by 15 percentage points (PP) and that academic studies that they reviewed generally indicate an increase of 10PP in international tariff rates enhances employment in protected industries by 0.2 % -0.4 %, but the increase of 1p in customs tariff costs by 0.3 % -0.6 %.

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Economists wrote: “This historical flexibility indicates that the protection of Trump’s tariff will raise industrial workers slightly less than 100,000 (with estimates from 0 to 240 thousand), but high input costs will create approximately 500,000 operations on employment (with estimates between 0-1MN).”

They explained: “The broader statistical evidence indicates the effects of net negative employment.” “Expanding the scope of these estimates to the American economy means a batch less than 100,000 for manufacturing employment from protecting customs tariffs, but about 500,000 withdrawals on the estuary of the pressure of the input cost.”

In a row, this estimate indicates that employment in the American economy would reduce the total employment by 400,000 jobs even after calculating the increase in employment in protected manufacturing industries.

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Definitions are taxes on imports paid by importers, who usually pass the high costs of consumers through high prices. (Reuters photos / Mike Blake / Reuters)

The analysis was martyred with three examples of the circumstances in which the customs tariff helped to develop local industries and the estuary industries. These targeted tariffs aimed at protecting emerging industries, such as MCKINLEY TRIFF’s impact of 1890 on US platelet manufacturing, and the manufacturing process in South Korea.

Another example includes strengthening the local manufacturing of highly flexible goods to import, such as the US tariff for European capture trucks of the 1960s, which has restricted severe imports to support the manufacture of light trucks. Customs tariffs on products that are not intermediate commodities and do not affect manufacturers of manufacturers may enhance local employment, such as definitions of Japanese motorcycles imposed to help Harley-Davidson.

However, the economists in Goldman emphasized that Trump’s tariff is broader and is not implemented in ways that do not focus on infant industries, highly elastic goods for demand or final products. This leaves statistical analysis that shows that although customs tariff plans may help in employment in manufacturing, this is likely to be clear on American employment in general.

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President Trump has issued a temporary stop for a period of 90 days on his “mutual” definition and the imposition of a 10 % basic tariff on American commercial partners. (Chip Somodevilla / Getty Images / Getty Images)

Economists said: “The scope of estimates – especially about the effects of employing high input costs – is considered large and it is difficult to have confidence in the pure influence, especially given that there is no increase in the historical tariff in size and its breadth by President Trump.”

They added, “But these estimates often indicate a negative impact on the protection of trade on employment, even before the employment is calculated from the slowdown in the growth that we expect under our basic outlook,” they added.

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The latest forecast of the Coldman Sachs foundation, which was updated after Trump announced that he had stopped the “consecutive” tariff plans, is expected to likely 45 % of the recession and GDP growth on an annual basis by 0.5 % for 2025 with 3.5 % basic PCE enlargement.