Goldman Sachs sharply raised its forecast for US tariffs in 2025 in its research report early this morning, warning that escalating trade tensions could severely impact economic growth, inflation and jobs. The bank now expects average US tariff rates to rise by 15 percentage points in 2025, up from the previous 10 percentage point baseline. The increase is mainly due to the expectation that the comprehensive "reciprocal tariffs" that Trump will announce on April 2 will impose an average of 15% tariffs on all US trading partners, and the average real impact of tariffs is expected to increase by 9 percentage points. Goldman Sachs raised its forecast for US core PCE inflation at the end of 2025 by 0.5 percentage points to 3.5%, citing the impact of rising import costs on inflation. GDP growth is expected to slow to 1.0% in the fourth quarter, down 0.5 percentage points from previous expectations, and the unemployment rate is expected to climb to 4.5% by the end of the year. Goldman Sachs raised the probability of a U.S. recession within 12 months to 35%, citing weak consumer and business sentiment and signs that policymakers may be more willing to accept near-term economic pain in pursuit of broader policy goals. With real income growth already decelerating, the economy may be entering a more fragile phase, with sentiment and policy risks weighing on the economy more than in recent years. (Jin X)