The Congressional Budget Office (CBO) estimates that increased tariffs between January 6 and May 13, 2025, will initially reduce federal deficits by $3 trillion due to increased tariff collections and lower interest payments. However, considering the negative impact on the U.S. economy from retaliatory tariffs and reduced investment, the net reduction in deficits is estimated at $2.8 trillion. CBO also projects a 0.4 percentage point annual increase in inflation for 2025 and 2026. These estimates predate court decisions on some tariffs, and the executive orders remain in effect.

Prepared by Christopher Adams and reviewed by editorial team.