The US presidential election will be held in November. Goldman Sachs has analysed the potential impact on US GDP in cases of Republicans or Democrats winning the election.

Goldman estimated that if Donald Trump wins by a landslide or if a divided government is formed, tariffs and tighter immigration policies will hit economic growth more than positive fiscal stimulus. If this happens, US GDP will suffer a shock of up to 0.5% in 2H25, but the impact will diminish in 2026.

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Goldman also expected Trump to raise tariffs on China by 20% and raise taxes on auto parts imported from Mexico and the EU. In addition, the decline in immigration will also slow down the growth of the labour force.

On the other hand, Goldman predicted that new spending and expanded middle-income tax breaks would slightly offset the decline in investment due to higher corporate tax rates, which would result in a very slight boost to average GDP growth between 2025 and 2026, if incumbent Vice President Kamala Harris is elected and Democrats take control of the House and Senate. On the trade policy front, Goldman expected no further tariff increases if Harris wins the election.



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