President Donald Trump is making sure to share – repeatedly – a recent government analysis that shows his sweeping array of tariffs is expected to reduce the federal debt by $4 trillion over the next decade, more than forecast only a few months ago.
The president has referenced the Congressional Budget Office report in multiple remarks and on Truth Social since it was released on Friday, saying it shows the success of one of his key, but controversial, policy platforms.
“The tariffs came in at $4 trillion,” Trump said at an Oval Office event on Monday afternoon, the second time he mentioned the report that day. “The CBO, they just announced it. I told them that was going to happen, but they refused to give us credit for it. Now they’re giving us credit because the money is flowing in.”
However, how much revenue the US actually realizes depends on several important factors, including whether the current levies remain in place into 2035 and how the nation reacts to the higher tariffs. The tariffs are expected to increase inflation and potentially weaken the economy, which could in turn reduce federal revenue. (The CBO’s analysis did not take the economic impact into account.)
Already, the president has announced some recent changes not incorporated into the analysis, including the coming suspension of tariff-free entry for products under $800. On the flip side, a federal appeals court is considering whether Trump overstepped his legal authority to impose many of the tariffs, which may lead to at least some of them being undone.
Also, the president hasn’t mentioned that the One Big Beautiful Bill, his domestic policy agenda that he signed into law last month, is expected to increase the federal debt by an estimated $4.1 trillion or so between 2025 and 2034, more than his tariffs are forecast to bring in.
Since taking office in January, Trump has slapped tariffs on a wide range of goods and countries, including increasing tariffs on most Chinese goods by 30%, on automobiles and car parts by up to 25%, and on most imports of steel and aluminum by 50%, among other examples. The levies are expected to increase the price consumers pay for computers and other electronics, clothing, toys, furniture and more, even as the president insists that foreign governments will pick up the tab.
The beefed-up tariffs are projected to lower the federal deficit by $3.3 trillion over the 2025 to 2035 period, plus reduce interest costs by an additional roughly $700 billion, for a total impact of $4 trillion, according to the CBO’s latest estimate. It looked at tariffs imposed as of August 19.
The CBO had estimated in early June that the tariffs implemented through May 13 would reduce the federal debt by a total of roughly $3 trillion.
However, Trump has also modified the rates on countries and sectors numerous times.
For instance, Trump slapped a minimum 20% tariff on most Chinese goods in April. But within days, he increased rates to 145% in response to China imposing higher tariffs on American goods. In May, following bilateral trade negotiations, both countries agreed to lower rates on one another’s goods, with the US charging a minimum of 30%. Rates are set to stay at the previously agreed upon levels through November. However, Trump said Monday that he’s prepared to hike tariffs on Chinese goods as high as 200% if it doesn’t ship more rare-earth minerals to the US.
The president also recently said he would consider distributing at least some of the tariff revenue to Americans in the form of rebate checks, though Treasury Secretary Scott Bessent said on CNBC last week that the money would go to paying down the national debt.
Tariffs and other customs duties have generated nearly $156 billion in revenue so far this year, through August 22, according to Treasury Department data.
The revenue is more than most people expected, said Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget, a watchdog group. And it could be difficult to pull back, though it would depend on the economic consequences.
“If we see a significant increase in inflation and a recession or something, it’s more likely that these get reversed, either wholesale or piece-wise through trade deals,” he said, noting that a prior CBO estimate that took economic impact into account showed tariffs would likely decrease revenue somewhat. “Whereas, if you just see a one-time, small price shift and some mild economic weakness, we may learn to live with these.”
CNN’s Elisabeth Buchwald contributed to this report.
