Goldman Sachs: Tariffs on Canada and Mexico will increase US inflation by 0.6%

Goldman Sachs economists predict that Trump's imposition of a 25% tariff on imported goods from Canada and Mexico, and a 10% tariff on Canadian energy, will cause US core consumer prices to rise by 0.6%.

"We do not rule out the possibility of suspending tariffs at the last minute," they wrote in a report to clients on Monday night.

This time, an obvious strategy is to postpone the deadline until April 2nd in order to align with other planned tariff announcements.

If tariffs take effect, we believe they are unlikely to become a permanent feature of US trade policy, although how long they will last is uncertain." In January, the U.S. core consumer price index excluding food and energy rose by 3.3% year-on-year while the Fed-preferred PCE index rose by 2.6%.