WASHINGTON – President Donald Trump's tariffs would reduce federal deficits by $2.8 trillion over the next 10 years, according to a new nonpartisan analysis released on June 4.
However, the report from the Congressional Budget Office also noted that tariffs would slightly reduce economic growth in the United States by 0.6% over the next 10 years, and contribute to a small 0.4% increase in inflation over the next year because the cost of consumer goods is expected to rise as a result of tariff policy.
The CBO report is a partial win for the Trump administration's second-term economic agenda, which has roiled financial markets and been held up in U.S. courts.
The report analyses the tariffs in place as of May 13, including an increased tariff on China and Hong Kong; tariffs on auto parts, steel and aluminum; and the president's 10% across-the-board tariffs implemented in early April. It does not include the deal between the United States and the United Kingdom in early May that lowered tariffs between the two countries.
The analysis also assumes that the tariffs will remain in place – which is no guarantee, as Trump has repeatedly tweaked the policy amid market swings – and assumes that tariffs will be collected on all imports without exception.
