The nonpartisan Congressional Budget Office estimates that President Donald Trump’s tariffs would shrink the U.S. economy and add to inflation while reducing the federal deficit by $2.8 trillion.

In a published letter to Senate Democrats, the CBO estimated the budgetary and economic effects of tariff increases that were implemented through executive actions between Jan. 6 and May 13. The analysis was completed before court rulings on the tariffs and it does not paint the full picture of Trump’s ever-changing tariff policy.

The analysis includes a 30% tariff on China and the temporarily lowered 10% reciprocal tariff rate on most of America’s trading partners that is set to expire in just over a month. It does not include the doubled 50% tariff rate on steel and aluminum that went into effect Wednesday morning. The analysis does not include the trade deal with the United Kingdom because it is only an agreement in principle and not legally binding.

The analysis found that shrinking of the U.S. economy would vary but said that tariffs would reduce gross domestic product growth by .06% each year, adding that real GDP will be “0.6 percent lower” in a decade than CBO’s earlier forecasts.

But the revenue that the U.S. government makes off the tariffs would reduce the total federal deficits by $2.8 trillion. It is important to note that the money raised to pay down the deficit is revenue from taxpayers who are paying the duties on imported goods.

“In CBO’s assessment, the changes in tariffs will reduce the size of the U.S. economy — in part because of tariffs imposed by other countries in response to the increases in U.S. tariffs. After accounting for that change in the size of the economy, CBO estimates that the changes in tariffs will reduce total federal deficits by $2.8 trillion,” the letter said.

“Reductions in investment and productivity stemming from higher tariffs will be partially offset by increases in resources available for private investment resulting from the reduction in federal borrowing. CBO estimates that, on net, real (inflation-adjusted) economic output in the United States will fall as a result,” the letter said.

The letter also said that tariffs will increase inflation “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.”

It also said that the tariffs will increase inflation largely because they will “make consumer goods and capital goods (the physical assets that businesses use to produce goods and services) more expensive, which will reduce the purchasing power of U.S. consumers and businesses.”

The letter said the CBO added the impacts of “uncertainty stemming from recent changes in tariffs.”

The letter responds to a request for information from the ranking Democrats on the Senate Budget and Finance committees and Senate Democratic Leader Chuck Schumer.