CBO Revises Trump Tariff Deficit Savings to $4 Trillion Amid Fiscal Concerns

The Congressional Budget Office has significantly revised its estimates for deficit savings from Trump-era tariffs, now projecting a $4 trillion reduction through 2035. This figure includes $3.3 trillion in primary deficit cuts and $700 billion in interest payment savings from reduced national debt.

The updated projections come as investors grow increasingly wary of U.S. fiscal policy, particularly with the debt-to-GDP ratio hovering around 100%. While tariffs may help offset the $4.1 trillion debt impact of Trump's spending package, economists warn the duties could slow economic growth—though the CBO report notably avoids quantifying this potential drag.

CBO Director Phillip Swagel emphasized the "significant uncertainty" surrounding these estimates, particularly regarding how long the tariffs will remain in effect and their broader economic consequences. The lack of clarity creates additional volatility for markets already grappling with mixed signals on fiscal policy.