"The Supreme Court ruled Friday that President Donald Trump's extensive use of tariffs during his first year back in office were illegal. The court responded to escalating protests from small businesses saddled with higher costs and a large portion of Americans who are skeptical as to the benefits of Trump's tariff regime. But by striking down part of Trump's trade agenda, the judges might send America's ever-widening deficit soaring even higher."
"One of those forces is the fate of Trump's tariffs. The severity of America's fiscal path has been somewhat "mitigated" in part by tariff-driven revenue, according to a report published Thursday by the nonpartisan Committee for a Responsible Federal Budget (CRFB). Removing this revenue stream would contribute to an "alternative scenario," one with an even steeper debt burden than the one projected by the CBO."
The Supreme Court invalidated large elements of President Trump's tariff program, removing a significant source of federal revenue. Small businesses and many Americans criticized the higher costs and questioned tariff benefits, prompting protests. The Congressional Budget Office projects federal debt reaching 120% of GDP by 2036 under current policies. The Committee for a Responsible Federal Budget finds that tariff-driven receipts have mitigated that trajectory; eliminating those receipts would produce an alternative scenario with steeper debt. Under assumptions that tariffs are not replaced and some spending becomes permanent or revived, deficits could approach $4 trillion, debt could rise to 131% of GDP in 2036, and interest costs could increase by $820 billion.
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