LONDON >> U.S. economic growth would likely get the biggest boost in the coming two years from the Democrats, headed by Kamala Harris, winning the White House and Congress in this November’s elections, according to Goldman Sachs.

Under a Republican sweep, or even with a divided government led by Donald Trump, economic output would take a hit next year, mostly from increased tariffs on imports and tighter immigration policies, Goldman said in a note late on Tuesday.

Job growth under a Democrat government would also likely be stronger than under the Republicans, Goldman said.

WHY IT’S IMPORTANT

The race between Harris and Trump is tight, with the Democrat eking out a narrow advantage in national polls and in some battleground states.

KEY QUOTES

“We 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, resulting in a peak hit to GDP growth of -0.5pp in 2025H2 that abates in 2026.”

“If 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.”

CONTEXT

The prospect of a Trump win, particularly alongside running mate, China hawk JD Vance, jolted markets in July.

BY THE NUMBERS

Under Harris, job growth would be 10,000 a month higher than if Trump wins with a divided government, and 30,000 higher than with a Republican sweep, Goldman estimates.

A Trump win would likely led to increased tariffs on auto imports from China, Mexico and the European Union that would raise core inflation, Goldman says.