By\u00a0Louis Jacobson | Politifact<\/p>\n
Published On 24 Jul 202524 Jul 2025<\/p>\n
One of the Trump administration\u2019s biggest tariff boosters, Commerce Secretary Howard Lutnick, recently said tariffs<\/a> will not only energise the industrial sector in the United States but also help the government\u2019s finances.<\/p>\n During a July 20 interview on CBS\u2019s Face the Nation, Lutnick told host Margaret Brennan that the US is collecting close to $30bn a month in tariffs. \u201cYou got to remember \u2013 this is going to pay off our deficit. This is going to make America stronger,\u201d he said.<\/p>\n But the maths falls short.<\/p>\n Multiplying the most recent month of US tariff collections by a full decade would not cover the 10-year costs of President Donald Trump\u2019s new tax-and-spending legislation<\/a>, much less all federal deficits during that decade. The current tariffs are slated to increase on August 1, including levies ranging from 20 percent to 40 percent for 21 countries,\u00a0 based on what the Trump administration has said.<\/p>\n An analysis by the Congressional Budget Office (CBO) \u2013 Congress\u2019s nonpartisan number-crunching arm \u2013 also projects that 10 years of tariff revenue increases under Trump will not pay for the added deficits from his bill or the cumulative deficits over the next decade. The projected added deficit from the bill is $3.4 trillion, on top of the existing projected deficit over the next decade of $21.8 trillion.<\/p>\n \u201cI can\u2019t envision a scenario where the tariff revenues eliminate the deficit,\u201d said Steve Ellis, president of Taxpayers for Common Sense, a group that tracks the federal budget.<\/p>\n The White House did not respond to a request for comment for this story.<\/p>\n How much is the US collecting from Trump tariffs?<\/p>\n The federal government has been taking in higher tariff revenues under Trump\u2019s more aggressive tariff policies. Currently, the tariffs are a baseline 10 percent for all countries, plus additional tariffs on some products such as steel. Economists say consumers will ultimately swallow much of the tariff increases.<\/p>\n Federal tariff revenue tracked by the Penn-Wharton Budget Model shows that, up to July 11, the federal government had collected about $100bn in tariffs so far this year. During the same period in 2024, before Trump took office, the federal government had collected less than $48bn in tariff revenue.<\/p>\n In June 2025, the most recent monthly data available, the federal government took in $27bn in tariffs, according to the Treasury Department. A year earlier, that figure was $6bn. That\u2019s an increase of $21bn a month because of Trump\u2019s trade policies.<\/p>\n If the government were to continue collecting tariff revenue at the June 2025 pace for a full decade \u2013 120 months \u2013 that would produce $2.52 trillion in tariff revenue.<\/p>\n That is in the ballpark of what the CBO published in June. Taking into account the potential economic shrinkage from higher tariffs, such as higher consumer prices, CBO projected that the boost in tariff revenue would reduce total federal deficits by $2.8 trillion over 10 years.<\/p>\n How does this tariff revenue compare with the federal deficit?<\/p>\n Without adding in the deficits from the bill Trump just signed, CBO\u2019s baseline projection for the cumulative deficits over the next 10 years is almost $21.8 trillion. That is about seven times the size of the CBO\u2019s projected tariff revenues over the same period.<\/p>\n And the projected tariff revenue under Trump would not fully cover the added deficits just from the \u201cmegabill\u201d Trump signed. According to CBO estimates, the law Trump signed on July 4 will raise deficits by $3.4 trillion beyond their previous trajectory over the next 10 years, which exceeds CBO\u2019s tariff revenue projection.<\/p>\n There is uncertainty about how much tariff revenue Trump\u2019s policies will generate, because he has frequently announced and then paused<\/a> higher tariffs.<\/p>\n \u201cIt is hard to know what the end game is,\u201d Ellis said. \u201cIs it high tariffs to generate revenue, which would reduce economic activity, or is it to rebalance the trade and eventually lower tariffs\u201d, and thus their revenue?<\/p>\n The Committee for a Responsible Federal Budget, a fiscally hawkish group, has\u00a0noted\u00a0that Trump\u2019s tariff policies have been challenged in court, and the initial ruling<\/a> by the\u00a0Court of International Trade\u00a0went against the administration.<\/p>\n