Jessica Rinaldi/Reuters

Trade disputes will continue to cost American households this year even as tensions ease, according to new government projections.

Tariffs are expected to reduce average real household income by $1,277 in 2020, the Congressional Budget Office said.

The estimates come just weeks after the Trump administration signed an interim trade agreement with China, which kept tariffs on thousands of products.

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A series of trade disputes between the US and other major economies will continue to cost American households this year even as tensions ease, according to new projections from a nonpartisan government agency.

In a report released this week, the Congressional Budget Office said tariffs are expected to reduce average real household income by $1,277 in 2020. While President Donald Trump asserts that other countries pay US tariffs, evidence shows that the majority of costs fall onto domestic businesses and consumers.

The estimates come just weeks after the Trump administration signed an interim trade agreement with China. The phase-one deal kept tariffs on more than $360 billion worth of imports from that country, though rates of those taxes were lowered on a portion of products.

Trump has separately escalated other economic disputes in recent months, including through renewed threats to slap tariffs on imported vehicles.

The CBO said that by raising prices and muddling the business outlook, tariffs could cause gross domestic product to fall by 0.5% in 2020. Those effects could fade in the coming years, the office said, if companies adjust production.

"CBO expects the effect of trade barriers on output and prices to diminish over time as businesses continue to adjust their supply chains in response to the changes in the international trading environment," the office said in the report.

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