WASHINGTON (Realist English). The Congressional Budget Office has sharply reduced its forecast for tariff revenues, cutting an estimated $1 trillion from President Donald Trump’s expected deficit-reduction package and lowering the total projected savings to $3 trillion through 2035.
In its updated assessment, the CBO said the revision reflects a combination of recent tariff rollbacks ordered by the White House and new data showing that far more imports are entering the United States duty-free than previously assumed. The agency noted that its August model estimated Trump’s tariff program had raised the effective U.S. tariff rate by 18 percentage points; recalculations now put the increase closer to 14 points.
The downward adjustment follows a series of rate cuts by the administration on goods from China, Japan and the European Union, as well as reductions on auto parts, lumber and selected agricultural products. Economists also found a decline in the taxable value of imports, driven by foreign suppliers offering deeper price discounts to offset U.S. duties.
Despite the revised projections, Trump continues to insist that tariff revenue can finance $2,000 payments to Americans and help reduce the national debt — claims economists view as unrealistic even before the latest CBO update. The president has also shown increasing willingness to retreat from tariffs under voter pressure, most notably by slashing duties on food products to address grocery-price inflation.
According to the CBO, the new $3 trillion figure includes $2.5 trillion in direct tariff revenue over the next 11 years and roughly $500 billion in reduced interest costs tied to smaller annual deficits. The previous forecast had pointed to $4 trillion in combined savings.
Analysts caution that further revisions are possible. Wayne Winegarden of the Pacific Research Institute said the CBO still underestimates the broader economic drag from tariffs, which could depress other federal revenues and shrink the net fiscal benefit. The agency itself highlighted significant uncertainties, including Trump’s frequent rate changes and a pending U.S. Supreme Court ruling that could limit presidential tariff authority or force refunds.
The CBO also warned that its modelling incorporates only publicly known exemptions. Should additional exclusions be granted or disclosed, “tariff duties collected could decline substantially,” the agency said.
