Tariffs Are Generating Big Revenue
President Donald Trump’s tariff strategy is starting to show dramatic results in the form of rising revenue. In April and May of 2025 alone, the U.S. government collected $37.8 billion in duties on imported goods, with May alone accounting for $22.2 billion, according to the Treasury Department. That number represents a 42 percent increase over April’s $15.6 billion. In total, tariffs made up about 6 percent of federal revenue in May.
This surge follows Trump’s decision earlier this year to impose a 10 percent blanket tariff on all imports to the United States, alongside steeper tariffs on specific categories such as cars, steel, aluminum, and potash. Trump also maintained the elevated tariffs on Chinese goods, which he said were necessary due to China’s role in the fentanyl trade.
While Trump publicly claimed that tariffs were bringing in $2 billion a day, Treasury records showed daily revenue in late April at about $285 million. That number has since grown, but even at $192 million per day, it falls well short of his public statements. Still, the increase from January, when daily revenue was around $128 million, shows that the tariffs are producing significant income.
According to the latest government data, total tariff collections this year reached $71.9 billion by June 12—an 81 percent increase compared to the same period in 2024. The scale of this growth has caught the attention of economists and policymakers alike.
A Tariff Strategy Years in the Making
Trump’s use of tariffs began in his first term, when he imposed a 25 percent tariff on steel and a 10 percent tariff on aluminum in 2018. Those early moves targeted what he called “unfair trade practices” by U.S. allies and adversaries alike. In 2019, he lifted the tariffs on Canada and Mexico as part of the new USMCA agreement, but the conflict with China escalated.
Under Biden, tariffs remained a key tool. In 2024, his administration imposed a 100 percent tariff on electric vehicles from China, a 50 percent tariff on semiconductor chips, and raised Canadian lumber tariffs from 8.5 percent to 14.5 percent, with warnings that they could rise to 34.5 percent. These moves followed Trump’s earlier tariffs, showing a rare point of continuity between the two administrations.
In 2025, Trump expanded his approach. On April 9, he announced a 10 percent tariff on all imports and kept in place higher tariffs for certain sectors. At the time, he said, “We are correcting decades of bad deals. We’re finally putting America first.” His administration later clarified that some auto-related tariffs would be eased and companies that had been double-charged would receive reimbursements.
Supporters See a Smart Strategy
Backers of the tariff plan say it’s a smart way to bring revenue into the government without raising income taxes. A White House official said, “We’re seeing countries like China blink. They’re talking exemptions. They’re cutting back. And they’re desperate to get back to the negotiating table.”
Peter Navarro, Trump’s former trade adviser, added, “This is real money coming into the Treasury. It means we’re finally standing up for the American worker.” The administration believes that the tariffs will reduce the trade deficit, strengthen U.S. manufacturing, and put pressure on countries to sign better deals.
The Congressional Budget Office estimated that tariff revenue could total $942 billion between 2026 and 2035. That estimate does not even include Trump’s most recent tariffs, which could push revenue even higher.
Customs enforcement has also played a major role. Customs and Border Protection reported that almost $23 billion in tariffs had only been collected after compliance reviews. That means the government is actively cracking down on companies that try to avoid the new duties.
Critics Warn of Higher Prices and Job Losses
Critics, however, warn that the economic consequences could be severe. Higher import taxes raise the cost of goods for businesses and consumers. Companies are already reacting. Stellantis laid off 900 workers. General Motors cut 200 jobs. Volvo announced it would eliminate 800 U.S. positions, all citing tariff pressure as a driving factor.
Consumer spending may be up for now, but economists believe that’s because shoppers are buying goods before prices rise even further. According to the U.S. Commerce Department, consumer spending rose 1.4 percent in April. But economists say that jump is “likely a reflection of buyers rushing to beat price increases.”
Consumer confidence is falling. The University of Michigan’s Consumer Sentiment Index dropped 11 percent in March. The Conference Board reported that consumer confidence hit its lowest point in 12 years.
Tariff critics also point out that the revenue gains are not as strong as they seem. Rachel Snyderman, a senior fellow at the Bipartisan Policy Center, said, “You may bring in short-term gains through tariffs, but those gains can be erased if the economy slows and tax revenue drops elsewhere.”
Research from Yale’s Budget Lab warns that for every dollar raised through tariffs, the federal government loses about 25 cents in income and payroll taxes. That’s because companies make less profit, hire fewer workers, and pay fewer taxes overall.
The same research predicts that the current tariff levels—averaging 28 percent, the highest in over 100 years—could cost the U.S. economy as many as 770,000 jobs by the end of the year.
Shifting Trade and Global Reactions
Imports from China have plummeted. In April, the U.S. imported only $24 billion in goods from China, the lowest level since 2010 outside the pandemic. Imports from Canada and Mexico also dropped, showing that the impact of tariffs is broad and growing.
China responded with its own wave of tariffs, some reaching 125 percent on U.S. goods. Both countries have since stepped back slightly, offering limited exemptions, but tensions remain high. The global economy is adjusting, with businesses looking to shift supply chains and reduce costs.
Tariff revenue still represents a small share of total federal income. While federal revenues amount to about 17.1 percent of U.S. GDP, tariffs account for just 0.3 percent. Trump’s strategy could raise that number, but it is still a long way from replacing income taxes as a primary funding source for the federal government.
The big question now is whether Trump’s high-stakes strategy will lead to better trade agreements or lasting damage. “This is a shake-up,” Trump said in late April. “And one way or the other, America will come out ahead.”
Supporters see a necessary fight. Critics see rising costs and falling confidence. Either way, the numbers are clear: Trump’s tariffs are changing the landscape of U.S. trade, and they’re doing it fast.
FAM Editor: So we have potential revenues from tariffs at 12 x$22 Billion or $252 Billion, DOGE cuts of about $180 Billion, and potentially $600 Billion if interest rates go down two percentage points. That means our budget deficit could fall almost a trillion dollars, in the first 6 months of Trumps term.
But at what cost? Will our economy slow down? Will we have inflation? Will we lose jobs? Maybe a recession? Trump is aware of these possibilities and so far has managed to avoid the immediate effects.
But the consequences of runaway national debt is economic collapse. That would be bad.
