US president Donald Trump’s sweeping tariff hikes on imports could shrink the US deficit by $4 trillion over the next decade, the Congressional budget office (CBO) said on Friday.According to CBO, Congress’ nonpartisan analyst, higher tariff revenue would reduce primary deficits by $3.3 trillion and trim federal interest payments by $0.7 trillion. The new estimate marks a sharp increase from June, when CBO forecast a $2.5 trillion reduction in primary deficits and a $500 billion drop in interest costs.The revenue boost could help offset the effects of the Republicans’ tax-cut and spending package passed earlier this year, which CBO said will widen the deficit by $3.4 trillion over 10 years.The US federal debt stands at $37.18 trillion, treasury department data shows, and continues to climb under both Republican and Democratic administrations as spending outpaces revenue. Lawmakers must pass new spending bills by the end of September to avoid a government shutdown according to Reuters.CBO cautioned that the current top tariff rates may not last, with trade negotiations and international legal challenges still in play.Tariffs across countries and products averaged 16.7% in August, up from 15.1% in June, according to Oxford Economics. US customs and border protection has already assessed more than $26 billion in duties this fiscal year, far above the hundreds of millions collected in the previous year, the analysis found.
