The Congressional Budget Office has revised downward its projection of the budgetary impact of tariff actions taken in 2025, estimating that tariff increases in effect as of November 15 will reduce federal deficits by $3 trillion from 2025–2035 if maintained.
The update, released November 20 by CBO Director Phillip Swagel, reflects both changes in tariff policy since August and new import, pricing, and customs-collection data.
CBO now calculates that the effective tariff rate on U.S. imports is roughly 14 percentage points above the 2024 average of 2.5 percent. Applied to 2024 trade flows, those rates would generate a reduction of $2.5 trillion in projected primary deficits over 11 years, plus $0.5 trillion in lower interest outlays due to reduced federal borrowing. The figures exclude macroeconomic effects, which will be incorporated in The Budget and Economic Outlook: 2026 to 2036.
The revised totals are below CBO’s August estimates, which anticipated an 18-point rise in effective tariff rates, a $3.3 trillion reduction in primary deficits, and a $0.7 trillion drop in interest costs. Two-thirds of the revision stems from updated data; the remainder reflects policy adjustments that lowered aggregate tariff burdens despite increases on selected products.
Between August 19 and November 15, major changes included reduced additional tariffs on China; new tariffs on India; product-specific duties on vehicles, parts, and lumber; and selective reductions for EU and Japanese goods.
CBO also incorporated negotiated exemptions for aircraft and parts, pharmaceutical-related items, certain natural resources, and later, agricultural products, consumer electronics, pharmaceuticals, and semiconductors.
More than one-third of imports are now unaffected by 2025 tariff increases.
CBO updated its models to account for higher USMCA claims, lower assessed steel and aluminum content in derivative goods, and increased foreign price absorption—now estimated at 5 percent of tariff increases—yielding smaller import declines and higher projected revenues.
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