Congressional Budget Office says Trump tariffs will reduce deficits by $4 trillion over next decade

The Congressional Budget Office (CBO) on Friday adjusted its projection on the impact that President Donald Trump's tariffs will have on the United States budget, finding that it will likely reduce U.S. deficits by $4 trillion over the next decade.

The number is an increase from the budget office's previous prediction in June, which found that it would reduce federal deficits by $2.8 trillion over the next decade.

The CBO found that the effective tariff rate for goods imported into the United States has increased by 18% compared to 2024. If the higher tariff rates remain the same from 2025 through 2035, then primary deficits would fall by $3.3 trillion, which would also lower the need for borrowing and save the government $700 billion in interest.

“CBO projects further increases in tariff revenues in the coming months,” the office wrote. “If there are no further changes in tariff rates, we project that customs duties from new and existing tariffs will total about $200 billion this fiscal year.”

The update is part of the CBO's short-term economic forecast, which spans from 2025 to 2028. The full short-term forecast will be released on Sept. 12.

Misty Severi is a news reporter for Just The News. You can follow her on X for more coverage.