Debt, Deficits, and Tariffs

Kyle Pomerleau and Ali Melad

National Tax Journal, 2026, vol. 79, issue 3, 805 - 824

Abstract: The federal government faces an unsustainable fiscal trajectory, with debt projected to reach 175.1 percent of gross domestic product (GDP) by 2056. Meanwhile, the Trump administration has enacted aggressive new tariffs. This paper reviews current tariff policy, its history as fiscal policy in the United States, and estimates the budgetary effects of current tariff policy. Under several plausible tariff and fiscal policy scenarios, debt as a share of GDP could range from 161 to 212 percent by 2056. The paper concludes by arguing that tariffs are an uncertain source of revenue while being both economically inefficient and modestly regressive.

Date: 2026
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