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XPost: alt.politics.economics

Hardly a day goes by without President Donald Trump boasting about the
record tariff revenue the US government has been collecting since he
ratcheted up taxes on almost every imported good.

“We have a lot of money coming in, much more money than the country’s
ever seen,” Trump said over the weekend, referring to tariff revenue.

Trump’s right: The US government collected nearly $30 billion in tariff revenue last month, according to the Treasury Department. That’s a 242%
jump in tariff revenue compared to last July.

Since April, when the president began imposing a 10% tariff across
nearly all goods, among several other steeper levies that followed, the government collected a total of $100 billion in tariff revenue, three
times the amount collected during the same four months last year.

Tariff revenue has soared after Trump's substantially higher levies
Monthly tariff revenue collected by the US government

Column chart showing that US tariff revenue tripled in July over the
previous year as a result of President Donald Trump's substantially
higher levies
0
10B
20B
$30B
Jan ’21
Jan ’22
Jan ’23
Jan ’24
Jan ’25
July 2025:
$29.6 billion
April 2025:
10% tariff on most imports went into effect
$7.2B
$7.6B
$7.6B
$8.5B
$7.9B
$8.6B
$8.9B
$8.8B
$9.4B
$9.1B
$9.4B
$9.5B
$9.7B
$9.5B
$9.5B
$10.5B
$9.6B
$9.9B
$10.3B
$10.1B
$10.4B
$9.6B
$8.8B
$8.1B
$8.4B
$7.9B
$7.5B
$7.7B
$7.8B
$7.9B
$8.3B
$8B
$8.1B
$8.1B
$7.6B
$7.2B
$8B
$7.9B
$7.4B
$7.7B
$7.7B
$7.6B
$8.7B
$8.9B
$8.8B
$9B
$8.4B
$8.3B
$9B
$8.9B
$9.6B
$17.4B
$24B
$28B
$29.6B
Note: Treasury statements record tariff revenue as collections from
customs duties and excise taxes.
Source: Treasury Department daily statements
Graphic: Elisabeth Buchwald and Matt Stiles, CNN

So what exactly is the government doing with all this money?

Trump has floated a combination of two options: paying down the
government’s multi-trillion debt and sending “tariff rebate checks” to Americans.

“The purpose of what I’m doing is primarily to pay down debt, which will happen in very large quantity,” Trump said Tuesday. “But I think there’s also a possibility that we’re taking in so much money that we may very
well make a dividend to the people of America.”

Neither has occurred – at least not yet. So it might appear to many
Americans that the billions upon billions of dollars flowing in from
tariffs, coming primarily out of the pockets of US businesses footing
the initial bills to import foreign goods, are collecting dust.

But there’s much more going on behind the scenes.

What happens to tariff revenue
Any revenue the government collects, through ordinary taxes or tariffs,
goes into a general fund managed by the Treasury Department. The
Treasury refers to that fund as “America’s checkbook,” because it’s used
to pay the government’s bills, such as distributing tax refunds.

When the amount of revenue the government takes in falls short of its
bills, meaning it runs a budget deficit, it borrows money to make up the difference. In total, the government is on the hook to repay more than
$36 trillion, an amount that has been steadily growing, raising alarm
bells among many economists claiming it’s weighing on economic growth.

That’s because, like any American borrowing money, the government has to
pay interest on its loans. The more the government borrows, the more
interest it has to repay, which is yet another expense the government
has to pay that doesn’t go toward public-good investments, such as
improving highway roads.

While the tariff revenue being collected isn’t sufficient to wipe away
the $1.3 trillion budget deficit the government’s running for the
current fiscal year, tariff collections have caused that figure to
shrink. That means the government doesn’t have to resort to borrowing as
much money as it otherwise would without the tariff revenue.

“It’s not like there’s a better use for the money,” Brett Ryan, senior US economist at Deutsche Bank, told CNN, referring to tariff revenue.

https://www.cnn.com/2025/08/06/economy/government-tariff-revenue

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