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Under a Republican sweep, or even with a divided government led
by Donald Trump, economic output would take a hit next year,
mostly from increased tariffs on imports and tighter immigration
policies, Goldman said in a note late on Tuesday.
Job growth under a Democrat government would also likely be
stronger than under the Republicans, Goldman said.
WHY IT’S IMPORTANT
The race between Harris and Trump is tight, with the Democrat
eking out a narrow advantage in national polls and in some
battleground states.
KEY QUOTES
"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,
resulting in a peak hit to GDP growth of -0.5pp in 2025H2 that
abates in 2026."
"If Democrats sweep, new spending and expanded middle-income tax
credits would slightly more than offset lower investment due to
higher corporate tax rates, resulting in a very slight boost to
GDP investment due to higher corporate tax rates, resulting in a
very slight boost to GDP growth on average over 2025-2026."
CONTEXT
The prospect of a Trump win, particularly alongside running
mate, China hawk JD Vance, jolted markets in July.
BY THE NUMBERS
Under Harris, job growth would be 10,000 a month higher than if
Trump wins with a divided government, and 30,000 higher than
with a Republican sweep, Goldman estimates.
A Trump win would likely led to increased tariffs on auto
imports from China, Mexico and the European Union that would
raise core inflation, Goldman says.
(Reporting by Amanda Cooper; editing by Barbara Lewis)
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