Barclays Private Bank
Any tariffs-related inflation shock should be short-lived. Similarly, just as how companies and consumers adjusted after the “trade war” in Trump’s first administration, we would expect the US economy to “move on” within a few quarters, following the announcement of new tariffs.
BCA Research
We expect major trade action from the Trump administration in 2025, which will likely be negative for both the global and US economies.
BCA Research
We expect at least one major broad-based unilateral tariff next year: either a 10% tariff on all US imports or a large tariff on imports from China. Trump’s tariff proposals go well beyond what was implemented between 2018 and 2019, to the point that even half measures would probably cause a substantial global shock.
Bel Air Investment Advisors
The Trump administration has vowed to impose additional tariffs on US trading partners, curtail legal immigration, and accelerate the deportation of illegal immigrants. While these policies could be inflationary domestically, these measures will likely be offset by liberal fossil fuel policies and significant deregulation across various industries and sectors, especially in the energy and financial sectors.
Capital Group
Trumponomics 2.0 policy priorities of tax cuts, tariffs and deregulation might be supportive of US economic growth and risk assets. It could also lead to a stronger dollar, higher inflation and elevated interest rates. We could see elevated volatility in interest rates and financial markets broadly as investors calibrate the direction of policy.
Charles Schwab
If history is any indication, the extreme tariff threats may simply be negotiation tools leading toward agreements with China and other countries, and potentially much less disruptive to economic growth, inflation, sales, and operations of multinational corporations.
Citi
With respect to Trump policies, the base case of our global team is tariffs, extension of the 2017 Trump tax cuts, a sharp curb in immigration inflows, a broad deregulation of Biden-era requirements, and a potential boost to animal spirits. They think this cocktail will bring moderately higher inflation in the US, while the effects on US growth may net out at around zero.
Comerica
Comerica assumes that tariff rates increase. That lifts near-term growth of industrial production, contributes to higher prices of consumer and capital goods, and as a result raises inflation. The forecast also assumes that curbs on immigration slow the growth of the labor force.
Deutsche Bank
On trade we assume a 10 percentage point increase in the tariff rate on imports from China in the first half of the year (ratcheting up a further 10 percentage points in the second half) and an equalisation of tariff rates on motor vehicles with Europe. The forecast also assumes a 5% universal baseline tariff, though that is more likely to be implemented late 2025/early 2026.
DWS
There can be little doubt that Trump will not be able to implement all of his plans in full, especially since some of them counteract one another. For example, getting a grip on the cost of living crisis, i.e. lowering inflation faster, is unlikely to go hand in hand with import tariffs and a ban on migration.
First Abu Dhabi Bank
Our back-of-an-envelope calculations suggest that Trump’s proposed trade tariffs could reduce US GDP by as much as 0.3% this year (2025) and by far more in 2026 if more onerous tariffs are implanted. The flip side to this scenario of course is that the impact could be less severe if all the associated tariff revenues are fully recycled into fiscal easing (tax cut) measures.
Goldman Sachs
Tariffs are likely to feature prominently in the new Trump Administration, coupled with modest additional tax cuts, more federal spending, and a light touch on regulation. That combination, meant to boost domestic business and weigh on foreign activity levels, should continue to keep capital flows tilted towards the US versus the rest of the world and support the Dollar on a broad basis.
Goldman Sachs
The disruptive macro and market impacts of across-the-board tariffs are the reason they aren’t in our baseline scenario. But we do see a 40% chance of them being enacted, making them an underpriced tail risk.
Jefferies
We believe that current market concerns over Trump fiscal expansion and tariff impact are exaggerated. We do see US fiscal deficits moving higher, but we believe that the fiscal policies will not be as negative as the market fears. Similarly, on tariffs, we see them more as a bargaining tool for Trump and do not think they would have as negative growth impact as is currently feared.
JPMorgan Asset Management
While the specifics and timing of potential US policy shifts remain unclear, we anticipate tax cuts, higher tariffs, reduced immigration and deregulation of various sectors.
LGIM
There are widespread expectations that tariffs imply a stronger US dollar, due to FX moves re-equilibrating trade flows in response to a relative price change and upward pressure on rates from higher inflation. We think that view ignores the potential impact on capital flows.
Macquarie
Tariffs are likely to be rolled out faster this time, with the level of new tariffs imposed on China and others building over time. That would see a modest impact on growth and inflation in the second half, with headwinds building into 2026.
Morgan Stanley
Morgan Stanley economists point out that tariffs can slow economic activity with a lag of two or three quarters. Therefore, tariffs could become a drag on US growth in late 2025 and in 2026.
Schroders
Widespread tariffs might be hard to implement into law, but the uncertainty will encourage US companies to reshore in any case. This could boost US growth at the expense of its neighbors, but we would also expect more monetary stimulus outside of the US to offset this.
TD Securities
The first phase of the new Trump presidency is to introduce global trade uncertainty with the aim of reshaping policy. The first order effect is bullish for the dollar, reflecting the impact global trade tensions and associated tariff jawboning.
TD Securities
China will be hit hard with 40% US tariffs imposed across the board. We expect policymakers to do everything in their power to replace lost export demand with domestic demand.