Overview
- CBO now projects tariffs will reduce deficits by about $3 trillion through 2035, down from $4 trillion in August, with roughly two-thirds of the downgrade tied to new data and the rest to recent rate changes.
- Recent rollbacks and adjustments lowered the effective tariff rate in some analyses to roughly 16.5% from earlier projections near 20.5%, trimming expected fiscal gains after cuts on certain agricultural items and a fentanyl-related tariff.
- Treasury reports duty receipts of $215.2 billion in fiscal 2025 and $40.4 billion so far in fiscal 2026, reflecting elevated intake but an uncertain path as policy shifts continue.
- Independent estimates suggest $2,000 rebates would cost about $600 billion per year, far exceeding likely sustainable tariff revenue, while Republican leaders signal a preference for using funds to reduce debt instead of issuing checks.
- Multiple court challenges are underway, with the Supreme Court reviewing key tariff authorities that could curtail or erase revenue, even as USTR Jamieson Greer says one-time $2,000 payments would not fuel inflation.