Tariffs: Money for nothing?

The dollars are rolling in to the federal government coffers from tariffs. And Trump is claiming victory.

“Indeed, Trump has routinely cited the tariff revenue as evidence that his trade approach, which has sowed uncertainty and begun to increase prices for consumers, is a win for the United States. Members of his administration have argued that the money from the tariffs would help plug the hole created by the broad tax cuts Congress passed last month, which are expected to cost the government at least $3.4 trillion.

“The good news is that Tariffs are bringing Billions of Dollars into the USA!” Trump said on social media shortly after a weak jobs report showed signs of strain in the labor market.”

But the Trump tariffs could prove addictive:

“Over time, analysts expect that the tariffs, if left in place, could be worth more than $2 trillion in additional revenue over the next decade. Economists overwhelmingly hope that doesn’t happen and the United States abandons the new trade barriers. But some acknowledge that such a substantial stream of revenue could end up being hard to quit.

““I think this is addictive,” said Joao Gomes, an economist at the University of Pennsylvania’s Wharton School. “I think a source of revenue is very hard to turn away from when the debt and deficit are what they are.”

Ultimately, tariffs are just another consumption tax. Importers pay the tariffs to the federal government, then pass the cost on to consumers. It’s just another regressive tax that falls most heavily on the bottom 50%.

Trump thinks tariffs are, in the words of the Dire Straits lyric, ‘money for nothing.’ American consumers won’t experience that, and inflation is already on the upswing. Hold on to your wallets, peeps.

 

https://www.bostonglobe.com/2025/08/03/business/trump-tariffs-money-revenue/

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