Here’s another unappreciated benefit of President Donald Trump’s tariffs: They’re now projected to slice the federal deficit by a whopping $4 trillion over the next decade.
That’s the latest estimate by the nonpartisan Congressional Budget Office, which projects new tariff revenue will fuel a $3.3 trillion drop in federal red ink through 2035, plus another $700 billion in interest-cost savings.
The new figures are based, in part, on the new revenue now streaming in to Uncle Sam’s coffers: CBO now sees tariff proceeds totaling $200 billion this year, up from the $80 billion it projected as recently as January.
July revenues alone were stunning, setting a record at nearly $30 billion — 242% more than the tariff take in July 2024.
All told, the $4 trillion slashed from the deficit eclipses the CBO’s official projection that One Big Beautiful Bill Act meant a $3.4 trillion bump — an estimate grounded in the fact that OBBBA prevented a enormous tax hike.
That’s good news: Not only does a lower deficit reduce the pressure on future budgets, it can also juice up the economy, pushing down interest rates and freeing money for the private sector.
And all that would be on top of all the other economic benefits of Trump’s program, like boosting US-based supply-chain sources, creating jobs and sparking investment in American businesses.
Trump’s deals — with the European Union, Japan, the Philippines, South Korea, Vietnam, the United Kingdom and, in part, China — have also gotten countries to lower their tariffs and open their markets to US goods and to commit to funneling trillions into America via purchases and investments.
The prez has also used the threat of tariffs to press for more cooperation on non-economic issues, from border control to undermining Vladimir Putin’s war machine.
Meanwhile, the economy is humming along, with low inflation and healthy growth.
Yes, tariffs are a form of taxation, though there’s considerable debate on who exactly pays how much of this tax — and at current levels are likely to mean less overall economic pain than, say, the income-tax hikes that OBBBA aborted.
The final verdict on Trump’s tariffs and the rest of his program is far from in.
But so far the results are pretty good.
Just don’t expect his critics to admit any part of it.