Analysts at Goldman Sachs are warning of diminished economic performance if former President Trump is elected and able to implement his agenda.

Trump’s plans to crack down on immigration and impose new tariffs on Chinese goods will take a chunk out of gross domestic product (GDP) growth to the tune of a half percentage point in the second half of 2025 before rebounding in the following year, Goldman analysts predicted.

“We estimate that if Trump wins in a sweep or with divided government, the hit to growth from tariffs and tighter immigration policy would outweigh the positive fiscal impulse,” they wrote in a Tuesday analysis.

Goldman predicted better performance outcomes in the event of a Harris presidency along with Democratic control of Congress, arguing that spending initiatives and tax credits would “more than offset” the hit to investment caused by a higher corporate income tax rate, which Vice President Harris has proposed increasing to 28 percent.

The 2017 Tax Cuts and Jobs Act, Trump’s marquee tax-cut bill, dropped the corporate income tax rate to 21 percent from 35 percent. President Biden’s most recent budget proposal also called for raising the corporate tax rate to 28 percent.

In the scenario that Harris wins the presidency and Congress is divided, policy changes would be “small” and have a neutral effect on GDP, Goldman said.

“Vice President Harris has a positive vision to strengthen the economy by building up the middle class, cutting taxes and lowering costs for working families and small businesses, and creating opportunities for all Americans to get ahead. On the economy, the choice could not be any more clear this November,” Harris-Walz campaign spokesperson Joseph Costello said in a statement.

The Trump campaign did not immediately respond to a request for comment from The Hill.

The incoming president could be looking at a changed set of economic conditions as well as different economic narratives to support or push against.

The Federal Reserve is widely expected to make its first interest rate cut in more than five years in September. The CME Fed Watch tool gives the Fed a 57 percent probability of a quarter-point rate cut as of Wednesday.

A lackluster job openings survey from the Labor Department released Wednesday increased the chances of a half-point cut, though a quarter-point cut is still more likely, according to CME.

Those results follow the July jobs report, which revealed a 0.2-percentage point uptick in joblessness from 4.1 percent to 4.3 percent.

Yield curves in the bond market are flickering toward a renormalization in which the 10-year pays out more than the two-year. Shorter term maturities have been more valuable over the past two years than longer term ones, leading some market commentators to warn of a recession that so far hasn’t materialized.