CBO: Tariffs could trim deficits by up to $4 trillion through 2035

The latest assessment from the Congressional Budget Office projects that President Trump’s tariff program could trim the federal deficit by as much as $4 trillion over the next decade, provided current tariff levels remain in place. The updated forecast, which accompanies 2025–2028 short-term economic projections, shows primary deficits shrinking by about $3.3 trillion and interest costs falling by roughly $700 billion, yielding a total deficit reduction of $4 trillion through 2035. The agency also notes that higher tariff revenues would reduce the government’s need to borrow, with Tariff receipts expected to reach about $200 billion in the current fiscal year if no further rate changes occur. The figures come as tariff revenue already has surged to levels unseen in the early months of the year, amplifying a long-running fiscal debate over the policy’s costs and benefits.

By mid-summer, tariff receipts had climbed steadily, culminating in $29.6 billion collected in July and bringing the year’s tariff revenue to about $158.3 billion. The pattern marks a dramatic departure from prior years and underpins the CBO’s assessment that the higher levy regime has the potential to affect...