Goldman Sachs analysts have forecasted a potential 5% decline in U.S. stocks over the coming months due to the latest tariffs imposed by the Trump administration. These tariffs are expected to negatively impact earnings forecasts for the S&P 500, with estimates suggesting a reduction in earnings per share (EPS) by approximately 2-3%. Goldman Sachs strategists noted that while these tariffs pose downside risks, the tariffs on Canada and Mexico may be temporary. The firm also anticipates a significant increase in the effective tariff rate, estimating it could rise by 4.7 percentage points, which is higher than previous expectations of a 3 percentage point increase. The expected tariffs could keep inflation around 2.6% through the end of 2025, with potential scenarios pushing it above 3%. Goldman Sachs indicated that the overall impact on GDP has not changed significantly, as the market reaction has been more subdued compared to previous tariff implementations in 2019.