Economists are warning about the former president's economic platform, while predicting a Democratic victory would cause growth

As financial institutions weigh the potential impact of November’s election, Goldman Sachs is warning that a victory by former President Donald Trump would likely lead to an economic downturn.

According to a Tuesday note from Goldman, economists at the firm “estimate that if Trump wins in a sweep or with divided government, the hit to growth from tariffs and tighter immigration policy would outweigh the positive fiscal impulse.” They project that GDP growth would peak at 0.5 percentage points in 2025, the positive effects of which would abate in 2026.

By contrast, Goldman predicts that if Vice President Kamala Harris wins the White House and Democrats sweep, “new spending and expanded middle-income tax credits would slightly more than offset lower investment due to higher corporate tax rates, resulting in a very slight boost to GDP investment due to higher corporate tax rates, resulting in a very slight boost to GDP growth on average over 2025-2026.”

In a statement to Bloomberg, Harris campaign spokesperson Joe Costello said that “right, left, or center, experts agree that Trump is threatening an economic disaster” that would result in increases in unemployment, inflation, debt, and a potential recession.

The Trump campaign told Bloomberg that “these Wall Street elites would be wise to review the record and acknowledge the shortcomings of their past work if they’d like their new forecasts to be seen as credible.”

Economic policy has become a centerpiece of both campaigns as Harris and Trump battle to win over anxious voters.

Trump has promised that, if elected, he would impose universal tariffs on all imported products, with a penalty anywhere between 10 and 20 percent on foreign goods. The Harris campaign has countered that such a policy would amount to “a national sales tax.”

In June, 16 Nobel Prize-winning economists issued an open letter warning that Trump’s economic platform “will reignite this inflation, with his fiscally irresponsible budgets.” The letter was written before President Joe Biden dropped out of the 2024 race, and stated that an “additional four years of Joe Biden’s presidency would allow him to continue supporting an inclusive U.S. economic recovery,” through legislation like the Inflation Reduction Act, which has become a pillar of Harris’s pitch to voters.

The famed economists added that “the outcome of this election will have economic repercussions for years, and possibly decades, to come. We believe that a second Trump term would have a negative impact on the U.S.’s economic standing in the world and a destabilizing effect on the U.S.’s domestic economy.”