Goldman Sachs (GS, Financials) forecasts that the United States will impose additional tariffs on Chinese goods in early 2025, coinciding with the expected return of Donald Trump to the White House.
With most of the implementation in the first half of the year, the investment bank projects these tariffs will average 20%.
Trump promised throughout his campaign to enact new trade policies including a 10% fee on products from other countries and a 60% tariff on Chinese imports. These ideas reflect the actions of his government during his first term, which greatly affected U.S.-China commercial ties.
Goldman Sachs pointed out that while there is a possibility for fresh trade disputes, the economic effects of such tariffs might be less noticeable than in the 2018-2019 timeframe. Since then, U.S. imports from China have dropped dramatically, therefore maybe limiting the extent of disturbances.
“While renewed trade disruptions may impede any rebound in international capital flows to China, the reality is that international investors have already shed a large proportion of China risk on perceived disappointments on stimulus delivery,” the bank said.
Goldman Sachs underlined that the difficulties China faces are progressively internal. The country is facing a property crisis as well as a more general economic downturn; recent government stimulus initiatives have not been enough to raise investor mood.
The investment bank said that while significant, delays in foreign commerce are probably less important for China's economic situation than its domestic problems.
