Take Trump 'Seriously' Not 'Literally' on Tariffs, Chief Economist at Goldman Sachs Says
American consumers should take President-elect Donald Trump seriously, but not literally, when it comes to his threats on tariff rates, said Jan Hatzius, chief economist at Goldman Sachs.
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When it comes to the uncertainty about the future of tariffs under the next Trump presidency, "you [don't] have to take everything entirely literally, but you have to take it seriously in a broad sense, because this is something that the White House gets to decide, because Congress has effectively ceded its authority on trade policy to the White House over the decades," Hatzius said in an interview with the Atlantic Council's GeoEconomics Center Jan. 9.
Consumers can expect a 0.3% to 0.4% hit to the GDP as a result of tariffs, which will be concentrated in 2025 because, "I think Trump will basically come out of the gate pretty quickly with those tariff announcements," Hatzius said.
He also made predictions about where to expect the tariffs on China, which might range from 5 percentage points to 60 percentage points. "The lower numbers are direct consumer goods: iPhones, other consumer electronics. And the 60 would be the lists one and two from the first Trump administration, which are predominantly capital goods and intermediate goods," he said.
In response to American tariffs on Chinese goods, Hatzius said, Chinese "export controls would be a very straightforward way of retaliating. And I certainly would expect some of that if things escalate."