Today’s inflation report proves that tariffs are not inflationary. However, tariffs are a huge revenue source! They accounted for nearly all of the record large $27 billion June budget surplus (biggest since June 2015 excluding any timing shifts). Remember that when the Congressional Budget Office was asked to project how much money tariffs could bring in, the agency predicted $2.8 trillion over the next 10 years. But this massive sum is not included in the “official” long-term budget forecast. The upshot? CBO’s estimates of the budget deficit will widely (and typically) miss the mark.