SUPREME COURT TARIFF RULING TO ADD $2 TRILLION TO DEFICIT, CBO FINDS

SUPREME COURT TARIFF RULING TO ADD $2 TRILLION TO DEFICIT, CBO FINDS

The Congressional Budget Office estimated Thursday that the Supreme Court's decision striking down most of President Trump's tariffs will increase the federal deficit by $2 trillion between 2026 and 2036, offsetting the administration's plans to use tariff revenue for tax cuts and debt reduction.

The ruling eliminates roughly $300 billion in annual tariff income but provides relief to households and businesses. Over the past year, tariffs contributed to 166,000 lost blue-collar jobs and added $1,700 in annual costs per American household, according to the CBO analysis.

CBO Director Phillip Swagel said the tariff elimination would ease pressure on U.S. companies and consumers, creating conditions for GDP growth despite the deficit impact. The $2 trillion figure includes $1.6 trillion in primary deficits and $400 billion in interest outlays.

The ruling derails Trump administration plans to use tariff proceeds to fund consumer rebates and replace income tax revenue. Finance leaders should monitor how Congress addresses the widening deficit gap in coming budget negotiations.