Goldman Sachs Sticks to Forecast of Increased Consumer Burden from Tariffs Despite Trump Criticism

Goldman Sachs Reaffirms Tariff Analysis Despite Trump's Criticism
"Consumers Will Bear Most of the Cost Increase"
Report Projects Core PCE Inflation Could Rise to 3.2% by Year-End

U.S. President Donald Trump demanded that Goldman Sachs replace its economist after the firm pointed out the negative economic impact of tariffs. However, within a day, the company reaffirmed its previous stance that tariffs would increase the burden on consumers.

Reuters Yonhap News

David Mericle, Chief U.S. Economist at Goldman Sachs, stated in a CNBC interview on the 13th (local time), "We stand by our previous analysis," adding, "If the recently imposed tariffs follow a similar pattern to those imposed in February, consumers will end up shouldering about two-thirds of the increased costs by this fall."

The controversy began with a Goldman Sachs report released over the weekend. In the report, Elsi Peng, U.S. Economist at Goldman Sachs, analyzed that American consumers are currently bearing 22% of the tariff costs, and if the current trend continues, this share could surge to 67%. In this scenario, the core Personal Consumption Expenditures (PCE) price index could rise from 2.8% in June to as high as 3.2% by the end of the year.

In response, President Trump criticized Goldman Sachs CEO David Solomon the previous day via his own social networking service, Truth Social, saying, "Either hire a new economist or focus on your DJ gigs." He argued that tariffs have not caused problems such as rising prices in the U.S., and that most of the burden is being borne by companies, governments, and foreign entities.

Economist Mericle commented on this, stating, "Companies that produce domestically and are protected from foreign competition will try to raise prices and profit from it. This is our estimate, and in fact, it aligns closely with the findings of many other economists' research."

He added, however, "We believe the price impact of tariffs will be a one-off event," and noted, "The Federal Reserve is likely to see the labor market, rather than inflation, as the main area of concern."

When asked whether President Trump's criticism had negatively affected his work, he replied, "We strive to provide the best economic outlook for our clients and will continue to present our analysis through our reports."

This content was produced with the assistance of AI translation services.