The Supreme Court’s decision to strike down the bulk of President Donald Trump’s tariffs has created a consolation prize for an administration hell-bent on using tariff revenue to bolster the U.S. economy. While the loss of an estimated $300 billion per year in income from tariffs has disappeared, fewer tariffs mean U.S. consumers and firms can breathe a sigh of relief over some alleviated pricing and labor challenges.
However, CBO director Phillip Swagel noted lower levies would provide relief for U.S. companies and consumers battered by nearly a year of elevated import taxes, providing more opportunities to grow U.S. GDP.
“In the most recent outlook, we projected that changes in trade policy since January 2025 would temporarily raise the rate of inflation, reduce real investment, lower the level of real gross domestic product (GDP), and reduce employment,” Swagel said in the report. “The termination of IEEPA tariffs dampens those effects.”
“We would not expect companies to lower prices in response to tariff reductions nearly as quickly as they increased them in response to tariff increases,” the Goldman Sachs analysts said.
