What is the anticipated timeline for tariffs to impact consumer wallets?

Goldman’s own forecast – reaffirmed by David Mericle – is that the “price‑tag” from the new U.S. tariffs will start showing up in consumers’ wallets within the next 12‑18 months, with the first measurable impact likely in the first half‑year after the tariffs are formally imposed. The analyst’s language (“will begin to hit”) is not a distant, multi‑year horizon but a relatively near‑term transmission, implying that once the tariff schedules are officially announced (or the legislation is signed), the cost‑pass‑through to retail prices, auto and home‑goods, as well as the broader CPI basket, should become visible on the calendar in the Q3‑Q4 2025 window.

From a trading perspective, the timeline translates into a short‑to‑mid‑term risk for consumer‑discretionary and retail‑focused equities (e.g., apparel, electronics, home furnishings) as margin pressure builds. Expect a step‑down in consumer‑confidence indices and a softening of retail‑sales forecasts for the fiscal quarters that coincide with the first tariff‑affected months. In the equity markets, this translates into under‑weighting high‑beta consumer stocks and over‑weighting defensive sectors (utilities, health care, consumer staples) that historically exhibit lower price‑elasticity. In the FX arena, a strengthening of the dollar (as import‑cost pressures rise) and widening of the trade‑gap could sustain USD‑JPY and USD‑CNY trends; the bond market may see a modest up‑tick in real‑yield spreads as inflation expectations tighten. Traders should monitor the Treasury Department’s tariff timetable, CPI releases, and retail‑sales data for the first concrete signal of price pass‑through; a breakout above the 2‑month moving average in consumer‑price indices would be a practical trigger to shift exposure toward defensive assets.