President Donald Trump’s tariffs would cut federal deficits by $2.8 trillion over the next decade, according to a new analysis by the Congressional Budget Office (CBO), which found that the fiscal gains from higher tariff revenues would far outweigh the slight drag on economic growth and modest uptick in inflation.
The tariffs imposed by Trump between January and May of this year on a range of goods would lower federal borrowing, reducing interest costs by $500 billion and bringing total deficit reduction to $3 trillion through 2035 before accounting for economic impacts, CBO said in a June 4 letter to Senate Democratic leaders. After factoring in the economic impact—slightly slower growth and higher prices—the total net reduction in projected deficits comes to $2.8 trillion.
