Goldman Sachs Says Trump’s Trade Policies Aren’t Hurting the Global Economy—Yet

President Donald Trump’s commercial overhaul has shaken the world and alarmed order of economists around the world, which stirs up widespread fears that its positions on tariffs and trade renegotiations derail economic growth.

Despite the fears that have remained tirelessly, Goldman Sachs analysts say that the world economy remains largely unscathed – for now.

In a note published on Thursday, the investment bank said that it sees “very few signs that uncertainty weighs on activity”, even if Trump continues to upset decades of commercial policy with aggressive protectionist movements, including high prices, steep withdrawals and nationalist rhetorics which have made it possible to perrupt the long -standing world supply chains.

Rates, nationalism and “Liberation Day”

Since his return to the White House for a second term, Trump has quickly decided to degenerate his “America First” economic program. It has introduced new tariff cycles on key imports from China, European Union and Mexico, while threatening to remove the United States in longtime multilateral commercial executives like the WTO. Its administration has also canceled trade benefits to the countries it accuses of taking advantage of the American market unfair and has requested individual trade agreements on American conditions.

One of the most dramatic moments came in April when Trump declared “Liberation Day”, a policy of politics which he formulated as a decision to “recover the economic sovereignty of America”. The announcement rocked the financial markets because it came with indices of new massive tariffs and more strict foreign investment rules. Economists have warned that this would probably trigger reprisals from other countries, would increase the costs of the company and discourage investments.

Business leaders and analysts have prepared for a slowdown, especially in the sectors exposed to trade such as manufacturing and technology. Some companies, anticipating higher import duties, have accelerated expeditions to the United States in a rush known as “front-loading”, which briefly inflated the commercial volumes. It was also feared that this artificial bump mask an underlying drop in economic momentum.

Goldman Sachs went to fears

Unlike these fears, Goldman Sachs says that the data shows no major economic blows. Since the end of 2024, factory hiring, private investment, consumer spending and wider activities have all strengthened or even strengthened. Forecasts for the growth of GDP in the second quarter and the full year have been revised upwards in key markets, including the United States, Germany, India and Brazil.

The bank attributes this resilience in part to the fact that the investment exposed to trade represents only a modest group of GDP in most savings – between 0.2 and 0.3 percentage points. Thus, even when the factory investment has slowed down, in particular in emerging markets, the macroeconomic effect was minimal.

In addition, global financial conditions have remained surprisingly loose. Interest rates are stable, credit circulates and companies’ loan costs have dropped slightly, helped by strong liquidity. This allowed companies to guarantee funding and more easily maintain capital expenditure plans, even in uncertain period.

“Uncertainty generally bites the hardest when financial conditions are tightened,” analysts wrote. “But this year, the opposite happened. Liquidity has improved, and that helped amortize the fallout. ”

Trump’s trade policies have undeniably created an atmosphere of uncertainty. The index of owner’s uncertainty of Goldman leaps greatly after his re -election and remained high in the first quarter of 2025. But the report noted that uncertainty began to alleviate in recent months, in part because of the signs that Trump was willing to negotiate new trade agreements with allies and rivals.

Some companies have adapted. While front loading has distorted short -term commercial data, Goldman said that even after adjusting these effects, there is little evidence of an investment or hiring trail. Analysts found no substantial difference in the performance between countries that increased exports to the United States and those that have not done so, suggesting that the impact of uncertainty has been largely stifled.

“While we continue to expect the prices to slow down the activity later this year, we expect this to be mainly motivated by the direct impacts of prices rather than the uncertainty concerning commercial policy,” concluded the report.

Employment gains and market highs

Adding to the image of the economic force, the United States has published stronger than expected job data in June. The economy added 147,000 jobs and the unemployment rate increased from 4.2% to 4.1%. The rate of participation in the active population has also increased above, suggesting that more Americans return to the labor market despite fears that commercial disruptions trigger layoffs.

The financial markets responded with optimism. The S&P 500 and the NASDAQ have reached record heights this week, supported by the conviction of investors that Trump protectionism could ultimately stimulate the national industry – at least in the short term – and by the perception that the trade scenarios the worst cases have not yet been materialized.

Another long road to come

While short -term prospects seem stable, Goldman warns that challenges remain. The complete effects of Trump’s second term of the second term, and economists warn that any prolonged escalation – especially if China or the EU retaliated – could ultimately increase investment, trigger inflation and erode global growth.

“The trail of uncertainty therefore seems smaller than fears,” wrote Goldman.

For the moment, however, the world economy seems to mix Trump’s commercial storm better than many feared it.