US President Donald Trump. Foto: Shutterstock
That’s the assessment announced by Philip Swagel, director of the nonpartisan Congressional Budget Office, reports investing.com with reference to Bloomberg.
He emphasized that it is still impossible to name exact figures due to the high uncertainty of Donald Trump administration’s actions, but the scale of the budget hole is already evident.
“We have not yet reached the level of understanding of the situation to give final long-term estimates with confidence,” Swagel admitted.
The major blow to the budget was a recent decision by the U.S. Supreme Court. The top court ruled that Trump’s use of the International Emergency Economic Powers Act to impose global import duties was illegal. This elimination of previously planned duties and related revenues alone automatically increases the budget deficit by $2 trillion over a ten-year horizon.
In an attempt to compensate for this loss of revenue, the Trump administration has introduced new trade measures, relying on already different laws. However, according to Swagel, these substitute tariffs will only bring in between $800 billion and $900 billion to the budget – that is, “a little less than half” of the amount the Supreme Court struck down.
“The difference between what the Supreme Court overturned and what the administration has reintroduced will cause the budget deficit to increase by about $1.1 trillion over 10 years,” Swagel stated.
He added that the White House still has “plenty of authority to impose new tariffs and adjust them,” so the bottom line of the budget deficit will be extremely difficult to predict until the new tariff policy process is finalized.
