A recent report from the Congressional Budget Office critiques President Trump’s tariffs, stating they will decrease the U.S. economy's size and raise inflation by 0.4%. While the tariffs are expected to reduce federal deficits by $2.8 trillion, the CBO emphasizes that overall economic output will decline due to retaliatory tariffs from other countries. This complex interplay suggests that while the administration may find some fiscal relief, households and businesses will face lowered purchasing power and increased living costs due to inflation.
According to a new report from the nonpartisan Congressional Budget Office, President Trump's tariffs will shrink the U.S. economy and spur inflation.
While the CBO estimates that changes in tariffs will promote a decrease in federal deficits by $2.8 trillion, they predict a larger reduction in economic size.
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