The Congressional Budget Office (CBO) projects President Trump's tariffs will reduce the U.S. deficit by $2.8 trillion over 10 years, but at a cost. The CBO analysis predicts reduced economic growth, increased inflation (0.4 percentage points annually by 2025-26), and lower household purchasing power. These estimates assume tariffs remain permanent, despite court challenges and Trump's fluctuating policies. Other models have predicted even more significant negative impacts on GDP and wages. The CBO acknowledges significant uncertainty in its projections due to the administration's potential policy changes.

Prepared by Christopher Adams and reviewed by editorial team.