Trump’s Tariffs Will Reduce Deficits by $4 Trillion Over Next Decade, Says CBO Report

The CBO also noted that revenues often lag several months behind the implementation of tariff policies.

U.S. President Donald Trump holds up a chart of reciprocal tariffs while speaking during a “Make America Wealthy Again” trade announcement event in the Rose Garden at the White House on April 2, 2025. Chip Somodevilla /Getty Images

A report released on Friday by the Congressional Budget Office (CBO) predicted that President Donald Trump’s tariffs will reduce federal deficits by around $4 trillion over the next decade.

If Trump’s global tariff hikes continue, increased revenue could shrink primary deficits by $3.3 trillion and cut federal interest payments by $0.7 trillion over the next decade, the CBO said. The current top tariff rates may not hold as negotiations with trading partners and international legal challenges are ongoing.