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GOLDMAN: TARIFFS WON'T SPUR MAJOR US RESHORING

When announcing reciprocal tariffs in April, U.S. President Donald Trump said "jobs and factories will come roaring back".

Some experts, however, caution that bringing manufacturing back to the United States might not be so easy.

To gauge whether reshoring "is plausible on a significant scale", Goldman Sachs has compared production costs in 40 countries and 24 sub-industries, finding U.S. costs are almost 50% higher than the top three countries exporting to the U.S. for most goods.

"Given these large cost differences, we believe higher bilateral tariffs are unlikely to drive a substantial increase in domestic production," said economists at the investment bank.

This fits with patterns seen during the 2018-2019 trade war, when tariffs on China led to rerouting production through third countries rather than boosting U.S. manufacturing, they wrote.

Goldman also said uncertainty about the final tariff structures would probably make companies reluctant to make large fixed-cost investments in U.S. production.

(Danilo Masoni)

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