Trade tariffs pose a threat to the global economic outlook, according to analysts at Goldman Sachs.
In their latest note, the brokerage firm identified the potential for widespread tariff hikes as a key risk to international markets and economic growth.
This concern is particularly evident in the wake of ongoing geopolitical tensions as well as the resurgence of protectionist policies among major economic blocs.
Goldman Sachs warned that if implemented, comprehensive tariffs, especially on key trade routes involving major economies such as the US and China, could disrupt supply chains and increase costs for businesses and consumers.
These developments have the potential to restrict global trade flows and affect corporate earnings, particularly in industries that rely heavily on international supply chains such as manufacturing and technology.
In its 2025 economic forecast, Goldman Sachs expects stable growth for major economies, including 4.5% for China and 2.5% for the US.
However, this projection depends on the assumption that trade tensions do not escalate to the point of introducing large-scale tariffs.
The note states that any deviation from this assumption such as the introduction of new trade barriers could lead to a downward revision of this growth projection.
The firm also warned of wider market implications of the tariff hike, noting that equity markets may face additional valuation pressure.
With risk asset prices already reflecting optimistic macroeconomic forecasts, the introduction of punitive trade measures could trigger increased volatility and weaken investor sentiment globally.
