Overview
- CBO now projects tariffs will reduce deficits by roughly $3 trillion through 2035, down about $1 trillion from August, with two-thirds of the downgrade from updated data and the rest from rate changes.
- Administration rollbacks have lowered the effective tariff rate from around 20.5% to about 16.5%, erasing roughly $800 billion in previously expected debt reduction.
- Republican senators signal they want tariff receipts used to pay down the $38 trillion debt, leaving Trump’s proposed $2,000 ‘dividend’ checks with steep legislative hurdles despite a mid‑2026 timeline.
- Independent estimates from CRFB peg annual costs for $2,000 payments near $600 billion, far above projected yearly tariff revenue, which totaled about $309 billion from January to October 2025.
- The Supreme Court is reviewing challenges to the administration’s tariff authority, a ruling that could curtail future collections or force refunds, adding further uncertainty to any rebate plan.