Trump’s tariffs would cut US deficits by $2.8T over 10 years and shrink the economy, CBO says
June 4, 2025
President Donald Trump’s sweeping tariff plan would cut deficits by $2.8 trillion over a 10-year period while shrinking the economy, raising the inflation rate and reducing the purchasing power of households overall. That’s according to an analysis released Wednesday by the Congressional Budget Office in a letter sent to Democratic congressional leadership. Baked into the CBO analysis is a prediction households would ultimately buy less from the countries hit with added tariffs. The budget office estimates the tariffs would increase the average annual rate of inflation by 0.4 percentage points in 2025 and 2026. The budget office’s model also assumes the Republican president’s tariffs will be in place permanently.
