Tariffs will lower deficits by $4 trillion over a decade
President Donald Trump is actively touting a new government report showing that his broad package of tariffs is projected to cut the federal debt by $4 trillion over the next decade — a higher estimate than was given just a few months earlier.
Since the Congressional Budget Office released its analysis on Friday, Trump has cited it repeatedly in speeches and posts on Truth Social, framing it as proof of the success of one of his most controversial policy strategies. “The tariffs came in at $4 trillion,” Trump said during an Oval Office event on Monday, his second mention of the report that day. “The CBO, they just announced it. I told them this would happen, but they refused to give us credit. Now they’re giving us credit because the money is flowing in.”
How much revenue the U.S. actually collects will hinge on whether the tariffs stay in place through 2035 and how the economy reacts to the higher costs. Economists warn the levies could add to inflation and weigh on growth, which would dampen federal receipts. The CBO report itself did not account for these broader economic effects.
Trump has already announced policy changes not reflected in the analysis, including ending tariff-free entry for imports under $800. At the same time, legal challenges could chip away at his tariff program: a federal appeals court is weighing whether he exceeded his authority in imposing many of them.
The president also does not highlight that his sweeping domestic legislation, the One Big Beautiful Bill signed last month, is projected to add about $4.1 trillion to the national debt between 2025 and 2034 — offsetting the savings expected from tariffs.
Since January, Trump has rolled out higher tariffs on a wide array of goods: a 30% increase on most Chinese imports, up to 25% on cars and auto parts, and a 50% hike on steel and aluminum, among others. These moves are set to raise costs for everyday products such as electronics, clothing, toys, and furniture, even as Trump insists foreign governments will ultimately bear the expense.