President Donald Trump's tariff increases on imports from foreign countries will reduce U.S. deficits by $3 trillion if they are maintained through 2035, the non-partisan Congressional Budget Office estimated on Thursday, instead of the $4 trillion the agency projected in August.

The CBO based its latest estimate on tariffs imposed by Trump between January 6 and November 15. It said that primary deficits would be reduced by $2.5 trillion over 11 years, with government borrowing costs falling by around $500 billion as a result. The August estimate was $3.3 trillion and $700 billion, respectively.

The revision was mainly based on new data, with the remainder stemming from the Trump administration's recent changes to its tariff policies.

Some federal courts have ruled that the administration overstepped its authority in imposing the tariffs, as the U.S. Constitution grants Congress powers over trade policy. The U.S. Supreme Court is reviewing those decisions.

Trump has boasted that the tariffs have created a windfall for the U.S. Treasury, while critics argue the higher costs of goods arriving from abroad are passed on to consumers in the form of higher prices on products when they reach American shelves.

Source: Investing.com