Goldman Sachs has weighed in on the economic implications of the 2024 U.S. presidential election, forecasting a more favorable economic outcome under Vice President Kamala Harris compared to former President Donald Trump. According to the financial firm, a Harris victory would be beneficial for the U.S. economy, while a Trump win could impede growth due to his proposed policies.
Goldman Sachs analysts argue that a potential Republican sweep in Congress coupled with a Trump presidency would likely result in diminished economic growth. This is attributed to Trump’s promises to impose stricter immigration policies and higher tariffs on imports, particularly from China. The analysts estimate that these measures could have a negative impact on economic growth that outweighs any positive effects from fiscal policies.
In contrast, Goldman Sachs projects that if Democrats win across the board, the economic impact of new spending and expanded middle-income tax credits would slightly outweigh the negative effects of higher corporate tax rates. This scenario is expected to result in a modest boost to Gross Domestic Product (GDP) growth.
Kamala Harris’s economic agenda includes restoring the expanded Child Tax Credit and introducing a new $6,000 tax credit for low- to middle-income families with newborns. Her plan also aims to reduce costs for prescription drugs and groceries while addressing the influence of Wall Street in the housing market.
Goldman Sachs anticipates that under a Harris administration, job growth would be significantly higher than under a Trump presidency. Specifically, job creation is expected to be 10,000 jobs per month higher compared to a Trump-led government with divided control and 30,000 jobs higher than under a complete Republican takeover. Harris’s immigration policies are expected to contribute positively to the labor force, albeit with a slower pace of immigration compared to Trump’s more restrictive approach.
Trump’s economic platform proposes a 10% tariff on all imported goods and has indicated a potential increase in tariffs on Chinese products, including electric vehicles. These measures are expected to drive up the federal deficit substantially. Studies from the University of Pennsylvania’s Penn Wharton Budget Model project that Trump’s policies could increase the deficit by $5.8 trillion over the next decade, a figure significantly higher than the $1.2 trillion increase anticipated under Harris’s proposals.
Goldman Sachs’s analysis underscores the divergent economic impacts of the two potential administrations, highlighting how policy choices could shape the U.S. economic landscape in the coming years.
