Synopsis:

Goldman Sachs believes the upcoming April 2nd US tariff announcement is unlikely to be a game-changer for the USD in the short term, as markets already expect a high initial figure followed by long implementation lags and negotiated reductions. Instead, near-term USD direction may hinge more on upcoming US payrolls data, while the longer-term structural impact of a hawkish US trade agenda remains broadly USD supportive.

Key Points:

• Tariffs Expected to Be "Headline High, Implementation Slow":
  The market anticipates a shock headline number, but with a lengthy and negotiable rollout, muting the near-term impact.

• Investor Expectations Already Tempered:
  Clients and price action suggest that tariffs are not seen as a durable shift, unlike other negative US policy signals.

• Markets Priced for Moderation:
  Goldman sees the bar for a negative market surprise as high, with the focus likely on the implementation timeline rather than the headline rate.

• Dollar Still Structurally Supported:
  Despite near-term concerns about US growth, GS maintains that a hawkish trade stance is structurally bullish for the USD, especially if it reinforces safe-haven flows and competitiveness.

• More Immediate Focus on US Data:
  The March payrolls report on Friday may prove more impactful for USD direction in the near term than the tariffs themselves.

Conclusion:

While the April 2 tariff headlines may grab attention, Goldman expects them to play out more as a negotiation tool than a disruptive policy shock. With US growth worries still lingering, employment data will be more market-moving near-term, but Goldman continues to believe the USD will benefit over time from a more assertive US trade posture.