President Donald Trump’s trade war is projected to reduce the average family’s real income by $1,277, according to a new report from the Congressional Budget Office (CBO).

The CBO, a nonpartisan congressional research arm, projected that the tariffs imposed by the Trump administration and retaliatory tariffs imposed by countries like China will reduce economic growth while increasing prices to consumers.

“Tariffs are expected to reduce the level of real GDP by roughly 0.5 percent and raise consumer prices by 0.5 percent in 2020. As a result, tariffs are also projected to reduce average real household income by $1,277 (in 2019 dollars) in 2020,” the report said. The figure is more than double the $580 projection in last year’s CBO report.

By comparison, the median American household pays about $2,000 in federal income taxes, meaning the trade war effectively amounts to a tax hike of more than 60%.

The report said the negative effects will “diminish over time” as companies adjust to market conditions, but still projects the trade war to lower economic growth every year through 2030 if the tariffs stay in place.

The CBO explained […]