U.S. Congressional Budget Office: Trump's Tariffs Expected to Reduce National Deficit by $4 Trillion Over Next Decade

The Congressional Budget Office (CBO) recently released an assessment indicating that if Trump continues to raise global tariffs, the increased revenue could reduce the primary deficit by $3.3 trillion over the next decade and decrease federal interest spending by $0.7 trillion.

Reuters, citing data from the U.S. Treasury Department, reported that the U.S. federal debt stands at $37.18 trillion. This figure has continued to grow during both Republican and Democratic administrations, as the U.S. Congress consistently authorizes federal spending that exceeds revenue.

The CBO's latest estimates show an increase from June, when the office predicted a $2.5 trillion reduction in the primary deficit and a $500 billion decrease in interest spending.

According to Oxford Economics, the average U.S. tariff rate on various countries and products was 16.7% in August, up from 15.1% in June. Analysis reveals that U.S. Customs and Border Protection has collected over $26 billion in tariffs this fiscal year, far exceeding the hundreds of millions collected the previous year.

The report notes that the current peak tariff rates may not be sustainable due to ongoing negotiations with trade partners and international legal challenges.