Trump’s retreats on tariffs have already wiped out $800 billion of expected deficit reduction, CBO estimates

According to the CBO’s updated baseline budget projections, the expected impact of tariff policy on U.S. deficits has fallen sharply since its last projections on tariff revenue in August. At that point, an effective tariff rate of 20.5% implied future deficit reduction of $3.3 trillion through 2035, and about $700 billion in interest savings. ? However, since June, the scope and magnitude of these tariffs have shifted significantly. The administration’s decision to pull back or soften tariffs on a range of imports—particularly with key trading partners like China and the European Union—in response to mounting trade tensions and retaliatory measures…