Goldman Sachs expects Biden’s administration to re-evaluate imports tariffs in certain areas, including tariffs on China as well.
In the last US Economics Analyst of 2020, Goldman Sachs expected the Biden’s administration to lower the rate of some tariffs, citing President-elect Biden’s campaign that he would “re-evaluate” tariffs upon taking office, while the consensus view appeared to be that tariffs will largely remain in place.
However, Goldman Sachs expected at least some decline in tariffs during Joe Biden’s first year, while new tariffs look very unlikely in its view. In Goldman’s perspective, the firm said that there is a good chance that some of the narrowly-applied tariffs on steel, aluminum, and other products imported from US allies will be reduced as the incoming administration seeks to mend relations with traditional US allies.
In the meantime, the fate of tariffs on imports from China is harder to predict. The firm expected the Biden Administration to eventually reduce those tariffs, but this seems likely to occur after extensive—and likely multilateral—negotiations, so while there is a fair chance progress could be made before the end of President-elect Biden’s first year, it could take longer. Nevertheless, Goldman expected that the overall level of US tariffs is likely to be lower by the end of 2021.
In addition, Goldman Sachs raised its U.S. GDP forecast in Q1 to +5% to reflect the new fiscal package, which was somewhat larger and came somewhat earlier than the firm had expected.
Source: Goldman Sachs