❓WHAT HAPPENED: The Congressional Budget Office (CBO) projected that tariffs implemented by President Donald J. Trump could reduce total deficits by $4 trillion over the next decade.
👤WHO WAS INVOLVED: President Trump and the Congressional Budget Office (CBO).
📍WHEN & WHERE: The updated projections were released by the CBO on Friday.
💬KEY QUOTE: CBO Director Phillip Swagel wrote: “If there are no further changes in tariff rates, we project that customs duties from new and existing tariffs will total about $200 billion this fiscal year.”
🎯IMPACT: The analysis suggests that maintaining Trump’s tariffs would reduce federal borrowing and interest costs, leading to significant deficit reductions.
A new Congressional Budget Office (CBO) analysis projects that President Donald J. Trump’s tariff policies could slash federal deficits by $4 trillion over the next decade. The CBO, Congress’s impartial fiscal analyst, shared these updated projections on Friday.
If President Trump’s tariff policies persist for the next 10 years, the CBO estimates a $3.3 trillion reduction in primary deficits. Furthermore, the increased tariff revenue would decrease the need for federal borrowing, cutting interest payments by $700 billion, collectively driving the total deficit reduction to $4 trillion.
These findings highlight the potential of Trump’s tariff strategy to significantly lower federal deficits and reduce dependence on borrowing, in addition to its primary goal of making American products more competitive against cheap, foreign goods produced in low-wage economies, encouraging the “reshoring” of jobs to the United States.
“If there are no further changes in tariff rates, we project that customs duties from new and existing tariffs will total about $200 billion this fiscal year,” noted CBO Director Phillip Swagel.
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