CBO Update: Trump Tariffs Could Cut Deficit by $3T

The Congressional Budget Office estimates that proposed tariffs could reduce the federal deficit by roughly $3 trillion through 2036 due to increased revenue.

However, the CBO also warns of potential side effects: • Slower economic growth

• Higher consumer prices

• Inflation rising from 2026–2029, which may offset some fiscal benefits

Key takeaway: tariffs may improve the fiscal balance, but could also increase inflationary pressure and slow growth.