The latest numbers from the Congressional Budget Office are eye-opening, to say the least.
According to the newest estimates, if the Trump tariffs continue on this same course for the next decade the government could cut as much as $4 trillion from the deficit.
From Forbes:
The nonpartisan agency said it had updated its estimates of tariff revenues as part of the development of the short-term economic forecast covering 2025 to 2028, to be published on September 12 ...
The CBO report found that increased tariffs — many targeting imports from China, Mexico, Canada, and the European Union as well as automobiles, steel, and other goods — have raised effective tariff rates by about 18 percentage points compared to last year. If these rates remain, primary deficits would shrink by $3.3 trillion and interest payments would fall by another $700 billion, bringing the total deficit reduction to $4 trillion over 10 years.
This is if, of course, the projections stay on track, and if the next president doesn't step away from the tariffs, and many other hypotheticals.
But the math is based on what we have seen so far, and it's definitely what President Trump was hoping for.
Higher tariff revenues mean less need for federal borrowing, resulting in significant savings on national debt interest payments. This marks a substantial revision from the CBO's June estimates following recent hikes in tariff rates and broader coverage across key imports, when the agency projected a $2.5 trillion decrease in primary deficits and $500 billion reduction in interest outlays in a report that examined the effects of the tariffs implemented between January 6 and May 13, 2025. The CBO said it used the same methods to generate the projections, mainly based on data from the Census Bureau, Customs and Border Protection, and the Treasury.
The tariffs are also projected to offset some of the revenue lost in the Big Beautiful Bill's tax cuts.
Trump's tariff strategy is still new to this century of economics, and there are many detractors. However, it's clear that President Trump is seeing what he had hoped to see from his efforts.
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