US Edition
Trump's Tariffs Would Cut US Deficits by $2.8T over 10 Years and Shrink the Economy, CBO Says
- On Wednesday, the Congressional Budget Office projected that President Trump's tariffs, applied between January 6 and May 13, 2025, would lead to a $2.8 trillion net reduction in the U.S. Budget deficit over the next decade, despite causing slower economic growth and higher inflation.
- The reduction in the deficit is largely attributed to higher income from tariffs and decreased costs associated with federal debt interest, although this projection does not take into account potential retaliatory tariffs or future adjustments to tariff policies.
- The tariff measures include a 30 percent tariff on China, 25 percent on autos, and a 50 percent steel and aluminum tariff, with retaliation expected but likely limited in scope.
- The CBO projects that the tariffs will slow annual real GDP growth by 0.06 percentage points through fiscal year 2035 and cause inflation to rise by about 0.4 percentage points during 2025 and 2026, describing the overall economic impact as limited, concentrated in the near term, and largely reversible.
- The analysis implies tariffs can generate substantial fiscal gains but also impose costs including slower growth, higher inflation, and uncertainty about retaliation and future tariff adjustments.
125 Articles
125 Articles
CBO Releases Report On Trump Tariffs - Patriot Newsfeed
In a significant shift in the economic debate over trade and taxation, the Congressional Budget Office (CBO) has released projections showing that recent U.S. tariff increases will reduce federal deficits by $2.8 trillion over the next decade. This surprising estimate lends powerful support to the Trump administration’s claim that tariffs can effectively pay for tax cuts, particularly its newly proposed extension of the 2017 tax reform package. …
Trump holds back crucial detail in attack on Congressional Budget Office
President Donald Trump attacked the Congressional Budget Office after its analysts found his tariff plan would cut the federal deficit, but he said their findings weren't issued soon enough.The nonpartisan legislative agency found the tariffs would cut deficits by $2.8 trillion over a 10-year period...
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