Aug. 21 (UPI) -- The Congressional Budget Office warned the Trump administration in a new analysis Wednesday that its tariffs against Chinese imports -- and any new tariffs -- will have a negative impact on the U.S. economy in the near future.
In a 90-page report, the non-partisan office projected that tariffs the government has already imposed will shrink gross domestic product by next year, and any new punitive taxes could stifle economic growth.
"Other revenues will increase ... by $7 billion (or 2 percent) in 2019," the report states. "Most of that increase stems from customs duties, which are anticipated to climb by $29 billion owing to new tariffs imposed by the administration."
The analysis also said the federal deficit will rise in the next decade beyond what was initially expected. The budget deficit will run an average of $1.2 trillion from 2020 and 2029 and comprise nearly 5 percent of total GDP -- figures "well above" the average over the past 50 years.
CBO Director Phillip Swagel said raised caps on discretionary spending for the next two years, as called for in the budget, was a major contributor to the revised projections.
"The nation's fiscal outlook is challenging," Swagel said. "Federal debt, which is already high by historical standards, is on an unsustainable course, projected to rise even higher after 2029 because of the aging of the population, growth in per capita spending on healthcare, and rising interest costs.
"To put it on a sustainable course, lawmakers will have to make significant changes to tax and spending policies -- making revenues larger than they would be under current law, reducing spending below projected amounts, or adopting some combination of those approaches."
The budget also suspends the debt ceiling through July 2021 and raises defense spending by 3 percent next year and non-defense spending by 4 percent.