Goldman Sachs: Trump's reciprocal tariffs may reach twice the market expectations, and the market may experience an "explosive impact" on April 2nd

On the eve of Trump's announcement of reciprocal tariff policy on April 2nd, Goldman Sachs' latest report warns that the actual tax rate may reach twice the market expectation and predicts that the White House might adopt a "bomb first, retreat later" strategy. The market could experience severe fluctuations characterized by an initial crash followed by stabilization.

Recently, Bloomberg and The Wall Street Journal reported that Trump will adopt a "targeted strategy", news which once boosted U.S. stocks rebound. Alec Phillips, chief political strategist at Goldman Sachs pointed out in his report that although reciprocal tariffs may cover most imported goods in America, specific tax rates are still unclear.

He warned: “Preliminary tariff statements tend to cause negative shocks to the market” for two reasons: one is government officials have indicated they might propose higher tax rates as negotiation chips initially - this was seen previously when taxes were raised on Canada and Mexico with high-profile announcements made first then withdrawn days later; secondly, Goldman Sachs survey shows that while average expected reciprocal tax rate is 9%, actual rates could be close to double this expectation. Goldman Sach’s final conclusion: there could be an "explosive impact" on markets on April 2nd but effects may quickly fade away.