US Congressional Budget Office projected the economy to grow 2.3% in 2019, unchanged from January forecasts. Growth is expected to gradually slow from 2020 to 2023, averaging 1.8% per year.
The slowdown ahead would be because growth of consumer spending subsides; as growth in purchases by federal, state, and local governments ebbs; and as trade policies weigh on economic activity, particularly business investment.
Additionally, “higher trade barriers—in particular, increases in tariffs—implemented by the United States and other countries since January 2018 are expected to make U.S. GDP about 0.3 percent smaller than it would have been otherwise by 2020.”
CBO further explained that “Tariffs reduce domestic GDP mostly by raising domestic prices, thereby reducing the purchasing power of consumers and increasing the cost of business investment. Tariffs also affect business investment by increasing businesses’ uncertainty about future barriers to trade and thus their perceptions of risks associated with investment in the United States and abroad.”
