US Consumers Expected to Bear Majority of Tariff Costs, Goldman Sachs Says

Research by Goldman Sachs highlights that U.S. companies have so far absorbed most of the costs from President Donald Trump’s tariffs, but this burden is increasingly shifting to consumers through higher prices. Consumers have absorbed about 22% of tariff costs through June, with projections suggesting their share could rise to 67% if recent tariffs follow historical patterns. This shift is expected to accelerate inflation, with Goldman Sachs forecasting the core personal consumption expenditure index to rise to 3.2% annually by December, compared to 2.4% excluding tariffs. While companies currently absorb many costs to avoid losing market share amid price-sensitive consumers, this strategy may reduce corporate profitability and limit reinvestment and innovation in the long term. The evolving tariff impact adds uncertainty to the Treasury bond market and monetary policy discussions, especially as President Trump publicly pressures the Federal Reserve for interest rate cuts and has challenged its leadership. Overall, the tariffs contribute to inflationary pressures and present trade-offs between short-term price stability and long-term economic growth.