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.

The American Flag flies over cargo containers at the Port Liberty in Bayonne, New Jersey, on Aug. 07, 2025. Spencer Platt/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.