With Republicans' "big, beautiful bill" working its way through Congress, some may be growing hopeful that the sweeping fiscal package could provide a fresh boost to markets and the economy.

That might be the case were it not for an equally powerful force facing the US: tariffs.

Writing on Monday, analysts at Goldman Sachs said that the trade war might complicate the outlook for tax and spending cuts to provide a tailwind to growth.

"The hit to growth from tariffs will more than offset the boost to growth from the fiscal package," a team led by Goldman's chief economist Jan Hatzius wrote.

After President Donald Trump's election win last November, investors grew convinced that pro-growth policies were coming to uplift both the economy and markets.

Forecasted tax cuts and promises of deregulation fueled post-election gains, though both efforts were soon overshadowed by Trump's aggressive tariff campaign.

Since then, trade negotiations have taken the edge off of last month's "liberation day" tariff package, and a budget bill has emerged on Capitol Hill. Included are tax cuts and efforts to deliver fiscal stimulus. To some economists, this has the potential to reignite economic growth, with positive implications for stocks.

While Goldman didn't speculate on what the bill would do for markets, it emphasized that the drag from tariffs will overshadow any boost to the economy.

Of course, things could still change, the bank said. There's the chance that state and local tax policy deductions become more generous, for instance, or that federal spending cuts occur sooner than is scheduled in the bill's current draft.

In a May 12 note, Hatzius raised his 2025 US growth forecast to 1%, after the US and China temporarily dialed back tariffs.