Goldman Sachs: Trump’s tariffs will lead to job losses

A new analysis from the financial firm Goldman Sachs finds that broad-based tariffs, like the ones recently imposed by President Donald Trump, will likely lead to higher unemployment.

While Goldman Sachs concedes that Trump’s tariff plan could create 100,000 manufacturing jobs, it says losses in other sectors could be as high as 500,000. That estimate does not account for the possibility of a recession, which would further weaken the job market.

The industries most hurt by these tariffs are those that rely on imported parts to make products, such as heavy machinery and semiconductor manufacturers. 

These findings are based on a compendium of academic studies on tariffs and their effects.

Tariffs are a tax on imports that are paid by American companies. These taxes typically result in higher prices for American consumers. Trump appears either unwilling or incapable of grasping this fact, insisting that tariffs will generate revenue and give the United States leverage over other countries.

Trump imposed broad-based tariffs on 185 countries on April 2. Most of those tariffs were scaled down to 10% a few days later, following stock market volatility and a massive selloff of Treasury bonds. Several high tariffs remain in place for goods from China, which accounts for about 17% of all U.S. imports.

An earlier Goldman Sachs analysis found that Trump’s sweeping cuts to federal spending could put a drag on hiring as well.

“Uncertainty about both tariffs and government spending cuts could depress job growth,” the report said. “We estimate that trade policy uncertainty will exert a roughly 20k drag on monthly employment growth, that the direct effects of federal spending cuts will reduce federal government payroll growth by 25-30k jobs per month this year, and that uncertainty about federal payments will reduce hiring by about 35k in sectors that rely heavily on federal funding such as state and local government, healthcare, and education.”

Both reports acknowledge that the long-term impacts of Trump’s tariffs are not known—but that his stated goals of revenue and job growth seem unlikely.

A White House spokesperson did not immediately respond to a request for comment.