Trump’s Tariffs Hit Hiring and Marketing, But AI Spending Holds Strong – Goldman Sachs

President Donald Trump’s newly announced tariffs may be reshaping how companies manage their expenses, but investment in artificial intelligence remains largely insulated from the macroeconomic tremors the policy has caused. While firms begin tightening their belts in anticipation of increased costs tied to trade, analysts say spending on AI is proving more resilient, even sacrosanct.

On April 2, Trump declared a sweeping set of tariffs dubbed “Liberation Day” levies, imposing a 10% baseline duty on imports and introducing a slew of new reciprocal tariffs. China, a central target of the measures, was hit hardest with a 145% tariff and excluded from the administration’s 90-day pause on some of the new tariffs granted to other trading partners.

In response, companies across multiple industries began reevaluating their operations, raising product prices, pausing select sales, and revisiting supply chain logistics. But according to Goldman Sachs, these adjustments are primarily affecting short-term expenses like head count and marketing rather than long-term capital investments.

“I think the macro will end up with more volatility on operating expenses — that’s head count, that’s marketing spend, that’s very, very long duration projects,” said Eric Sheridan, co-business unit leader for technology, media, and telecommunications at Goldman Sachs. He made the remarks during a recent episode of the Goldman Sachs Exchanges podcast released Wednesday.

Sheridan added that AI spending, on the other hand, is being treated differently. “I think given the sheer number of players investing both offensively and defensively at AI, I think this spend will get protected for a little longer than the macro environment might influence it,” he said.

He pointed to Meta as a prime example of how the tech sector is prioritizing AI despite the broader economic uncertainty. The company, in its Q1 2025 earnings report, increased its full-year capital expenditure forecast from a previous range of $60–$65 billion to $64–$72 billion. Much of that increase is going toward AI infrastructure, including data centers and computing capacity.

“The messaging coming out of the company was, ‘We continue to find ways to find efficiencies inside the organization, but we are not at a point where we want to sacrifice long-duration investments, mostly articulated through capex, just because the macro environment could look a certain way for three, six, or nine months,’” Sheridan noted.

Meta CEO Mark Zuckerberg reinforced this message on the company’s earnings call, describing AI as “the major theme” driving its strategic direction. While the company trimmed its overall expense guidance slightly, down from $114–$119 billion to $113–$118 billion, it signaled no pullback on AI-related commitments.

The broader trend reflects what many in the tech industry see as a crucial investment race, not just to capitalize on AI’s potential, but also to avoid falling behind rivals. This competitive pressure, according to Sheridan, is a key reason why AI spending is being safeguarded.

Following the tariff announcement, tech companies saw an initial drop in stock value, but shares quickly rebounded on the back of strong earnings and sustained AI investment. Meta and Microsoft, in particular, helped spark a comeback for tech stocks, with investors responding positively to the clarity around continued capital investment in AI.

However, the labor market implications of the tariffs are expected to be significant. With cost pressures mounting, firms are more likely to limit hiring and reduce discretionary expenditures like marketing in order to offset the burden from higher import costs. Sheridan emphasized that while companies are trimming operational fat, they are steering clear of cutting into strategic initiatives like AI that are tied to long-term competitiveness.

The US and China are expected to hold trade talks in Switzerland this weekend as part of an effort to manage tensions following the tariff hikes. The result of the talk is likely to shape the next phase of the trade tension.