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Tariffs will reduce deficits by $2.5 trillion over 10 years: CBO
https://thehill.com/business/budget/5332407-trump-tariffs-deficit-reduction-cbo/
Tariffs will reduce deficits by $2.5 trillion over 10 years: CBO
President Trump’s tariffs will take a major bite out of U.S. deficit levels, reducing them by $2.5 trillion over the next decade and shrinking the size of the U.S. economy, the Congressional Budget Office (CBO) found in a Wednesday analysis.
The deficit reduction is almost exactly the same size as the deficit addition that would result from the GOP’s “big, beautiful bill.” The CBO found that the bill would add $2.4 trillion to deficits through 2034, according to a separate analysis released Wednesday.
The tariffs measured by the CBO are those implemented from Jan. 6 to May 13, which includes the trade truce with China announced May 12.
The CBO included in its calculation a menu of tariffs that Trump has announced since taking office: a 30 percent tariff on imports from China and Hong Kong; 25 percent tariffs on imports from Canada and Mexico that started March 7; 25 percent tariffs on steel and aluminum from March 12; 25 percent tariffs on most automobile imports starting April 3; 10 percent tariff on imports from most countries that began April 5; and 25 percent tariff on imports of most auto parts, as of May 3.
Trump has said since the start of his term that he would implement tariffs to balance trade with other countries and to try to spur a manufacturing boom in the U.S. He has routinely announced tariffs, then paused them in an effort to strike a trade deal with a particular nation. But several tariffs have stuck and the overall tariff rate is now between 10 percent and 15 percent, the highest level in decades.
The boosted projections for federal revenue will likely raise long-term economic confidence, especially since the bond market has been quaking in recent weeks. Bond yields have popped in response to tariffs and legislation.
https://thehill.com/business/budget/5332407-trump-tariffs-deficit-reduction-cbo/
Tariffs will reduce deficits by $2.5 trillion over 10 years: CBO
President Trump’s tariffs will take a major bite out of U.S. deficit levels, reducing them by $2.5 trillion over the next decade and shrinking the size of the U.S. economy, the Congressional Budget Office (CBO) found in a Wednesday analysis.
The deficit reduction is almost exactly the same size as the deficit addition that would result from the GOP’s “big, beautiful bill.” The CBO found that the bill would add $2.4 trillion to deficits through 2034, according to a separate analysis released Wednesday.
The tariffs measured by the CBO are those implemented from Jan. 6 to May 13, which includes the trade truce with China announced May 12.
The CBO included in its calculation a menu of tariffs that Trump has announced since taking office: a 30 percent tariff on imports from China and Hong Kong; 25 percent tariffs on imports from Canada and Mexico that started March 7; 25 percent tariffs on steel and aluminum from March 12; 25 percent tariffs on most automobile imports starting April 3; 10 percent tariff on imports from most countries that began April 5; and 25 percent tariff on imports of most auto parts, as of May 3.
Trump has said since the start of his term that he would implement tariffs to balance trade with other countries and to try to spur a manufacturing boom in the U.S. He has routinely announced tariffs, then paused them in an effort to strike a trade deal with a particular nation. But several tariffs have stuck and the overall tariff rate is now between 10 percent and 15 percent, the highest level in decades.
The boosted projections for federal revenue will likely raise long-term economic confidence, especially since the bond market has been quaking in recent weeks. Bond yields have popped in response to tariffs and legislation.
