06.04.25

Trump Tariffs Will Hurt Economic Growth, Boost Inflation, Raise Costs to Families, CBO Finds

Non-partisan Analysis Requested by Merkley, Schumer, and Wyden Finds Trump Tariffs Amount to a Regressive $2.5 Trillion Tax Hike

WASHINGTON, D.C. – If the Trump tariffs remain in effect – in spite of a recent court ruling that they are illegal – they will slow economic growth, boost inflation, and hurt working- and middle-class families, according to a new analysis from the non-partisan Congressional Budget Office (CBO). The analysis was requested by Senate Budget Committee Ranking Member Jeff Merkley (D-OR), Senate Democratic Leader Chuck Schumer (D-NY), and Senate Finance Committee Ranking Member Ron Wyden (D-OR).

"Trumpflation is here," said Budget Committee Ranking Member Jeff Merkley. "As this CBO analysis makes clear, Trump's tariffs are increaing the cost of products that families need, even as Republicans in Congress are working to pass his 'Big, Ugly Bill' that will leave millions without health care and millions of children hungry to fund tax giveaways for the wealthies Americans. As always with Trump, it's families lose, billionaires win."

“The report by the non-partisan Congressional Budget Office shows what American consumers are already feeling: Trump’s chaotic trade war drives up prices, hurts America’s economic stability, and creates mayhem for families and small businesses. Trump’s tariffs are nothing more than a tax on the American people. Yet, Trump – despite the chaos, the hurt felt by businesses and consumers – is digging in his heels. It’s beyond time for Senate Republicans to stand up to Trump and work with Senate Democrats to pass legislation that would stop this nonsense and economic devastation,” said Senate Democratic Leader Chuck Schumer.

“It’s not enough for Trump and Republicans to kick families off of their health care and take food off of their tables – he’s trying to pay for it with an unprecedented level of tariffs on the things people buy,” said Finance Committee Ranking Member Ron Wyden. “CBO’s analysis shows Trump is going to make Americans pay trillions in new taxes on groceries, cars, beer – almost everything we buy from other countries – and make it even harder for families to afford the essentials they need.”

Among the report’s findings, CBO concluded that:

  • The Trump tariffs will be equivalent to a $2.5 trillion tax hike over the 2025-2035 period.
  • The Trump tariffs and anticipated retaliatory tariffs from our trading partners will shrink the economy by making goods more expensive, increasing uncertainty for businesses, and reducing productivity. In all, by 2035, the tariffs will shrink the economy by 0.6 percent, or $265 billion.
  • The Trump tariffs will boost inflation, resulting in a price level that is 0.9 percent higher by the end of next year. All households will face higher prices.
  • The Trump tariffs will disproportionately hurt working- and middle-class families. As CBO previously noted, “Because households at the lower end of the income distribution spend a greater share of their income on goods, they would experience the largest declines in purchasing power.”

The Senators asked CBO to analyze the economic and budgetary effects of the Trump tariffs that were in place as of May 13, which included a base level 10 percent tariff on imports from all countries, a 25 percent tariff on all Mexican and Canadian imports, a 30 percent tariff on all Chinese imports, and supplemental tariffs on automobiles, automobile parts, steel, aluminum, and Canadian energy. Last week, the U.S. Court of International Trade ruled that many of these tariffs were implemented illegally, a ruling that has an appeals court has temporarily stayed.

To read the complete analysis, click HERE.

This press release has been updated.

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