NEW YORK, July 3 (Xinhua) -- The actual implementation of the tariff plan proposed by former U.S. President Donald Trump would hurt economic growth and lead to a hike of interest rates by as much as 130 basis points by the Federal Reserve, according to Goldman Sachs Chief Economist Jan Hatzius.
If the United States implements Trump's plan to impose a 10 percent tariff on all imported goods and all other countries reciprocate, inflation in the United States would increase by 1.1 percentage points, said Hatzius at a banking industry meeting on Tuesday.
The expansion of U.S. gross domestic product would be hurt by 0.5 percentage point from the move even if tariff revenue is fully recycled into tax cuts, according to Hatzius.
The Federal Reserve would raise interest rates by 130 basis points to deal with inflation pressures from higher tariffs, said Hatzius.
Trump floated the idea of imposing a 10 percent tariff on all imported goods and 60 percent of tariff on goods imported from China as he campaigns for the 2024 U.S. presidential election.
