Goldman Sachs: Tariff Rollback Cuts Inflation Impact by 0.1%, Prices Won’t Drop
Goldman Sachs economists say Supreme Court’s 6-3 ruling invalidating Trump-era Section 122 tariffs reduces the effective rate from just over 10 percentage points to about 9 and trims core PCE inflation by only 0.1% in 2026. They warn companies won’t lower prices as quickly as they raised them, keeping inflation outlook intact.
1. Supreme Court Blocks IEEPA Tariffs
In a 6-3 decision, the Supreme Court struck down Trump-era tariffs imposed under the International Emergency Economic Powers Act, rolling back a 15% levy implemented through Section 122 to zero. The ruling reduces the effective tariff rate since 2025 from just over 10 percentage points to about 9 percentage points.
2. Inflation Impact Analysis by Goldman Sachs
Goldman Sachs economists estimate that tariff pass-through has already lifted core Personal Consumption Expenditures by roughly 0.7% through January and project only a 0.1% additional increase in inflation for the remainder of 2026. The modest change leaves the bank’s broader inflation forecast largely unchanged.
3. Pricing Outlook and Refund Doubts
The firm cautions that companies will not reverse prior price increases as quickly as they imposed them, meaning consumer prices are unlikely to fall. Treasury officials have also indicated that refunds for approximately $180 billion in collected tariffs are unlikely to be issued to Americans.