Per U.S. CBO, economic output will fall nationwide

The U.S. Congressional Budget Office released a statement warning of the current economic downturn which the nation is facing.

Senate Minority Leader Chuck Schumer.

In accordance with the adjusted tariff rate set on May 13th, the U.S. economy is expected to contract (GDP nominal) in reaction to supply chain issues and inflation caused by President Donald Trump's "Liberation Day" tariff wave. It estimates that, from lost productivity/efficiency from foreign goods, the country is expected to contract by $2.8 trillion over the next decade, setting the U.S. GDP down a negative track and giving a strong opportunity for China and India, two emerging powers contesting American economic dominance, to gain an edge internationally.

The U.S. Congressional Budget Office, in reaction to this new report, send a formal letter to Senate Democrats including Minority Leader Chuck Schumer and Oregon Senator Ron Wyden showing their resentment to the Trump tariff policy in regard to fiscal security, and gave a warning to them that the costs of consumer goods will rise.

The Congressional fiscal policy hub stated, "CBO estimates that, on net, real (inflation-adjusted) economic output in the United States will fall as a result." It added, "Inflation will increase by an annual average of 0.4 percentage points in 2025 and 2026, in CBO’s estimation, reducing the purchasing power of households and businesses..."

This is very worrying not only for America's position in the world as the current economic leader, but also for the financial safety of the country and its citizens. In particular, the inflationary brunt that the majority of the Americans must now sustain may be too much for feasibility. While real wages have stagnated, costs will increase even further than they already are. Expect savings to decline and debt to increase, benefiting the bonds market but hurting the financial accounts of most Americans.

President Trump, Sec. of Commerce Howard Lutnick, Sec. of Treasury Bessent, and other top Republican officials have voiced support for these tariffs, however. Bessent, when confronted with the very real possibility of price hikes by many American businesses, affirmed, "Some are and some aren't..." Although a defiling of the tariff "inflation" argument, it fails to take into account the laundry list of businesses that are raising prices as we speak, including Best Buy and Walmart.

Although current inflation data shows the lowest rate of inflation in about four years, it's too early to celebrate. This data does not take into account a full economic period of tariffs; once we get new data from the current situation, with spiked tariffs, we could make accurate conclusions.

What's true is the fact that these tariffs have been deemed unconstitutional by the courts.