Don’t expect prices at the store to fall just because the Supreme Court struck down President Donald Trump’s tariffs.
At best, companies may slow the pace of future price hikes on goods that get tariff relief. But they’re unlikely to cut prices outright, economists at Goldman Sachs wrote in a note published Sunday.
“We would not expect companies to lower prices in response to tariff reductions nearly as quickly as they increased them in response to tariff increases,” the economists wrote.
The bank estimates tariff passthrough has already lifted core Personal Consumption Expenditures, the Federal Reserve’s preferred inflation gauge, by about 0.7% through January. It expects only an additional 0.1% increase over the rest of 2026.
Friday’s 6-3 Supreme Court ruling scrapped tariffs imposed under the International Emergency Economic Powers Act. The White House quickly announced a 10% Section 122 tariff and then raised it to 15% the next day.
The shift would bring the increase in the effective tariff rate since the start of 2025 down from just over 10 percentage points to about 9 percentage points, Goldman estimates, leaving its inflation outlook little changed.
Tariff refunds may take years
On economic growth, Goldman said imports from countries that see meaningful tariff reductions, particularly China, should rebound in the coming months.
But that likely won’t give the economy much of a lift. Any rebound in imports from China would be offset by companies restocking shelves after earlier frontloading, trade reshuffling, and small declines in imports from higher-tariff countries.
Goldman estimates first-quarter 2026 GDP growth at 3.4%, though that includes a temporary boost from the end of the 2025 government shutdown. It continues to forecast 2.5% growth by the fourth quarter of 2026.
Friday’s ruling also sets up a fight over roughly $180 billion in tariffs already collected.
Treasury Secretary Scott Bessent said on Friday it was “unlikely” Americans would ever see refunds.
“I got a feeling the American people won’t see it,” Bessent said during a speech before the Economic Club of Dallas, adding that the administration has other tools to reimpose tariffs and that sorting out any repayment could take years.
