The U.S. deficit will shrink by $4 trillion over the next decade thanks to Donald Trump’s aggressive tariff campaign, according to projections from the Congressional Budget Office. The forecast , released Friday, says the primary deficit will drop by $3.3 trillion between now and 2035 from duties already imposed, with another $700 billion saved on interest payments tied to a smaller national debt. The total, $4 trillion in deficit reduction, comes as Trump’s fiscal agenda raises concerns about spending. The CBO, led by Phillip Swagel, noted that the projected impact from tariffs is about one-third larger than what they estimated earlier in May, when fewer measures had been rolled out. Since then, Trump has stepped up enforcement and announced new trade actions, pushing the numbers higher. New tariff projections help offset spending bill impact Trump’s controversial spending package, the One Big Beautiful Bill Act, is expected to add $4.1 trillion to U.S. debt by 2035. But the updated tariff estimates now nearly cancel out that rise. That near balance has become a central issue for investors, especially as the country’s debt-to-GDP ratio sits at around 100%, making U.S. Treasuries less attractive to some money managers. The CBO’s latest analysis doesn’t calculate how these tariffs might affect the economy’s overall size. Most economists think the duties will slow growth, but the report doesn’t try to guess by how much. Swagel warned the figures are built on shaky ground. “The estimates are subject to significant uncertainty,” he said, pointing to unknowns like how long the tariffs will last, whether exceptions will be granted, and how much precedent actually exists. Even with the caveats, the numbers are landing well at the White House. Trump and his administration have long argued that tariff revenue would cover increased federal spending. Treasury Secretary Scott Bessent said this week he now expects more money to come in from import taxes than he’d planned for earlier. “We’re going to bring down the deficit to GDP,” Scott told CNBC. “We’ll start paying down the debt, and then at that point that can be used as an offset to the American people.” Over at S&P Global, the credit ratings agency highlighted these incoming funds too. This week, the firm reaffirmed the U.S. government’s debt rating, citing “broad revenue buoyancy, including robust tariff income” as the reason. Their analysts said this extra money would help cushion any fiscal damage from the tax cuts and spending baked into Trump’s agenda. The CBO also reminded people that: “Typically, once tariff rates go into effect, they are not applied to goods already in transit to the United States, which can take as long as two months.” White House opens new furniture tariff probe under national security rule On Friday, Trump revealed a new step in his trade crackdown, saying his administration would launch a fresh tariff investigation focused on furniture imports. He posted on Truth Social that furniture coming into the U.S. would be taxed at a “rate yet to be determined.” He said the process will be completed within 50 days, although other similar investigations have often taken longer. A White House official confirmed the probe will be handled under Section 232, which allows the federal government to apply tariffs in the name of national security. This move also creates a legal backup for other duties Trump imposed earlier this year. In April, he hit a long list of U.S. trading partners with “reciprocal” tariffs, and in February, import taxes were placed on China, Canada, and Mexico. But those actions are currently facing legal challenges. If a federal appeals court throws out those earlier duties, this new Section 232 investigation could give the White House a second path to keep them in place. It’s a legal insurance policy, in case Trump’s first round of tariffs doesn’t survive court scrutiny. If you're reading this, you’re already ahead. Stay there with our newsletter .
