CBO: Third of Goods Not Covered by New Trump Tariffs
The Congressional Budget Office updated its estimate of how much tariffs would reduce the federal deficit, if they stayed in place for 10 years, now saying they would reduce it by $2.5 trillion rather than $3.3 trillion (not counting saved interest costs).
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The estimate, released Nov. 20, reflected changes to tariffs since August, including reductions on Section 232 tariffs and other tariffs for Japan and the EU, a reduction on tariffs on China, new tariffs on lumber and derivatives and more vehicles, and the doubling of tariffs on Indian goods.
They also reflect the new exemptions for goods not grown or mined in the U.S.
"Accounting for all announced and implemented exemptions, we estimate that more than a third of imports are unaffected by tariff rate increases from policies enacted from January 16, 2025, to November 15, 2025," the CBO wrote.
The independent analysis also changed its estimate of how much of Canadian and Mexican exports are USMCA-compliant, and therefore, entering duty free. It refined its estimates of the level of tariffs on derivatives, and it changed its modeling of how much of the tariffs exporters are absorbing. They previously estimated exporters would not lower their prices at all; now they say they will reduce their prices by an amount equivalent to 5% of the increase in tariffs. That last modeling change increases the tariff revenue estimate, because it leads to a smaller decline in imports.