Donald Trump went after Goldman Sachs’ CEO David Solomon on Truth Social. He even recommended that Solomon fire his chief economist or at least have him “stay in his DJ lane.” And last month, Goldman’s chief economist Jan Hatzius was busy warning their clients about the economic impact of Trump’s new tariff policies. This comment is an example of that alarmism.
David Solomon is a genius, at least if you buy the mainstream portrayal of the head of Goldman Sachs. He keeps his passion alive as a DJ, spinning gigs internationally. Trump’s remarks have sparked conversations about Solomon’s dual career and the performance of his bank’s economic team.
Trump didn’t like Hatzius’s recent gloomy review. He contended that it indicated that American consumers would pay a growing portion of the costs associated with tariffs. According to the research note from Hatzius and other Goldman researchers, “Our estimates imply that US consumers had absorbed 22% of tariff costs through June but that their share will likely rise to 67% by October if the later tariffs have the same impact over time as the earliest tariffs.”
In his social media post, Trump emphasized his belief that tariffs were not causing inflation or other issues for the American economy. He stated, “Tariffs have not caused Inflation, or any other problems for America, other than massive amounts of CASH pouring into our Treasury’s coffers.” He continued on to say that, in fact, it is companies and foreign governments that pay these tariffs, not consumers.
Despite Trump’s assertions, Hatzius has been a critical voice since he became Goldman Sachs’ chief economist in 2011. His dire predictions about the fallout from tariffs on the American consumer must have struck a chord with Trump. In the wake of that criticism, Trump scapegoated Solomon and Goldman Sachs for failing to account for the revenue these tariffs bring in. Last week, the Treasury Department announced an unexpected boom in tariff revenue, including almost $28 billion just in the month of July.
Trump’s camp didn’t identify any particular economist for Solomon to supplant. He did a really good job at pointing out his displeasure with the forecasts currently being provided to the public by Goldman Sachs. He remarked, “They made a bad prediction a long time ago on both the Market repercussion and the Tariffs themselves, and they were wrong, just like they are wrong about so much else.”