President Trump's tariffs are projected to reduce government deficits by $3 trillion over the next ten years, a figure $1 trillion lower than earlier estimates, according to the Congressional Budget Office (CBO). This revised forecast may create challenges for the administration's proposal to issue $2,000 tariff dividend checks, particularly with Senate Republicans who favor deficit reduction.
The CBO's updated analysis indicates that tariffs implemented between January 6 and November 15, if maintained until 2035, would reduce primary deficits by $2.5 trillion. When accounting for an estimated $500 billion in interest savings from lower borrowing, the total deficit reduction reaches $3 trillion.
This revision returns the CBO's projection to its June estimate, after a temporary increase in August. The downward adjustment in expected deficit reduction is attributed to updated data on actual tariff collections and a series of tariff rate reductions, including those affecting imports from China and certain food products.
The CBO now estimates that over one-third of all U.S. imports are not subject to the tariff changes enacted this year.
In response, White House spokesman Kush Desai stated that President Trump's tariffs are generating trillions in revenue for the federal government, with costs ultimately borne by foreign exporters. He added that this revenue, combined with spending cuts and economic growth, will support the economy.
The CBO's revised deficit reduction figure could complicate the administration's plan to distribute $2,000 tariff checks to individuals by mid-2026, especially given congressional interest in using such revenue to address the deficit.
