Trump’s tariffs bring in record revenues, could reduce deficit by $4T — but will American households pay the price?
Although they have roiled markets, there’s no question that President Donald Trump’s trade policy actions have boosted the federal government’s customs revenues. The good news is this additional money coming in will help reduce the national deficit as well.
In January, before Trump’s tariffs were announced, the Congressional Budget Office (CBO) had projected that customs revenues would total $80 billion in fiscal year 2025, which is close to the average of the previous five years.
However, as a result of the tariff hikes, through July the revenue totaled $136 billion. Almost $30 billion was collected in July alone, per Treasury reports.
"Historically, tariff revenue has never accounted for more than about 2% of total federal government revenues in the modern era. And with the tariffs that are in place today, that could go up to 5% or perhaps even higher," said Shai Akabas, the vice president of economic policy at the Bipartisan Policy Center, to NPR [1].
Now the CBO says this means there will be a greater budgetary effect as well.
“We project that increases in tariffs implemented during the period from January 6, 2025, to August 19 will decrease primary deficits (which exclude net outlays for interest) by $3.3 trillion if the higher tariffs persist for the 2025‒2035 period,” said the recent report from the federal agency.
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