Economists at Goldman Sachs have analyzed the potential effects on American consumers if the United States imposes new tariffs on imports from Canada and Mexico. Their findings suggest that implementing a 25% tariff on goods from these neighboring nations, along with a 10% tariff on Canadian energy products, could increase the U.S. core Consumer Price Index (CPI) by 0.6%.
The investment bank's report notes that while the U.S. government might still suspend these tariffs at the last minute, their potential duration remains uncertain if implemented. Goldman Sachs analysts believe these measures are unlikely to become permanent features of U.S. trade policy. One possible strategy, according to the report, could involve delaying the tariff implementation deadline to April 2 to align with other planned trade announcements.
This analysis comes as the United States continues to face persistent inflationary pressures. Recent data shows the core CPI, which excludes food and energy, rose 3.3% year-over-year in January. Meanwhile, the personal consumption expenditures (PCE) price index—the Federal Reserve's preferred inflation gauge—increased by 2.6% annually.
If Goldman Sachs's projections prove accurate, the proposed tariffs would exacerbate existing inflation trends, placing additional financial strain on American consumers already grappling with elevated prices across various sectors of the economy.