The PIIE discusses the revenue, but a more important question remains unanswered.
For all the talk of “reciprocal tariffs”, the number of exemptions is massive.
For example Trump has set reciprocal tariffs on Canada at 35 percent and Mexico at 30 percent.
However, there are so many USMCA exemptions that the effective rate for Canada is 2.3 percent (up from 0.1 percent). The effective rate on Mexico is 4 percent (up from 0.3 percent).
In contrast, the effective rate on Japan rose from 1.4 percent to over 15.4 percent.
The EU effective rate is 8.5 percent up from 1.0 percent, but well under an agreed 15 percent.
It’s these exemptions that calmed the market from Trump’s initial reciprocal announcements.
PIIE Analysis
Please consider Trump’s tariff revenue tracker: How much is the US collecting? Which imports are hit?
President Donald Trump’s tariffs are raising government revenues, but how much is the US Treasury actually collecting from US importers after the starts, stops, delays, exclusions, and other factors? And what products and countries are hit? This monthly tracker measures tariff revenues in practice over time.
Tariffs are taxes collected by the US government from US businesses when they import goods. The tariff revenues are expressed as a percentage of monthly total import values that US businesses pay (monthly tariff revenue divided by monthly import value, by category or country), including shipping and insurance. These percentages are generally lower than press reports of headline tariff rates because the headline rates do not take exemptions or delays into account. For example, in August 2025, Trump exempted aircraft from the general 15 percent tariff on imports from the European Union agreed at that time.
Trump claims that tariffs can make an outsize fiscal contribution. This claim can be put in perspective by comparing actual tariff revenues with the size of the projected budget deficit (figure 3). The Congressional Budget Office projected the federal budget deficit in fiscal year 2025 will be $1.9 trillion. As of June 2025, tariff revenues since January 2025 totaled $93.9 billion, contributing just 5 percent of the projected deficit. It is worth noting that federal revenues collected during the fiscal year-to-date (October 2024 to June 2025) are $254 billion higher than the same period in the previous fiscal year, while the federal deficit is $64 billion larger. But tariff revenues since January 2025 are still only 1.8 percent of the projected total federal revenue in fiscal year 2025 of $5.2 trillion.
Ponder Proposed Redistributions
The revenue numbers are through June so double the PIIE’s revenue estimate from 1.8 percent to 3.6 percent of revenue for the full year.
That’s not nothing, but recall that Trump proclaimed several time he would use that revenue to balance the budget.
Next consider this Tweet.
Mish “Instead of collecting tariffs from consumers and redistributing some of it back, I propose not taxing consumers and small businesses with asinine tariffs in the first place.”
The Important Question
I am nearly 100 percent certain the en banc appeals court will strike down reciprocal tariffs.
En banc means a full court (11 justices) will hear the case as opposed to the normal 3-panel picked at random.
An en banc hearing of final arguments is underway now.
On May 28, I commented The Court Unanimously Strikes Down Trump’s Global Tariffs, Here’s Why
The word tariff is not even in the act. Nor are synonyms like duties.
Second, there is no emergency. An emergency is a sudden unexpected crisis. Trade deficits have existed for decades.
Third, there is no unusual or extraordinary threat. Trump has even imposed tariffs on nations with which we have no trade deficit including islands inhabited only by penguins.
Fourth, there is lack of a clear authorization by Congress to grant Trump such authority. The applicable principle involved is called “major question”.
The Tax foundation estimates the cost of Trump’s tariffs to be over $2 trillion. If that’s not a “major question” then what is?
A court stay has been in place since the lower-court ruling and the appeal is underway.
It would be amazing if the appeals court ruled for Trump. But the key question is how the Supreme Court will rule.
Recall that the Court ruled against Biden on student loans largely on the basis of the “major question”. There are even more reasons to strike the idea here.
However, although it’s constitutionally clear, a ruling against Trump is by no means certain.
Hypothetical Vote Count
The three liberal justices are certain to vote against Trump. That means we need two more.
Pair 1: Barrett and Roberts
Pair 2: Barrett and Gorsuch
Pair 3: Gorsuch and Roberts
If I am correct, I think Barrett is already on board. I can’t help but think Roberts will go with the majority, and perhaps decide.
If it’s pair 2, add Roberts for a 6-3 decision. The bigger the majority, the more cover for all of them.
A friend comments:
You are right to look to Gorsuch. His penchant for literalism, base your decision on your view of grammar not the intent of the folks passing the statute — his form of extreme “textualism” —makes him a possible vote. It’s very hard to read “emergency” in a condition that has existed for decades. But the problem with literalism is that English words have alternate meanings. There are alternate meanings to the Latin-origin word emergency, especially when placed in the relevant sentence.
I’m not at all convinced Barrett is “on board.” She’s a very sensible textualist, but like all conservatives, she has a healthy respect for the President’s power on international relations. For example, the India tariff, based on policy vis a vis Russia, is exactly the kind of action we judicial conservatives don’t want courts to touch. The judiciary is just not equipped to deal with international affairs. Still, I agree with you that she is the likeliest vote. All she has to do is say that “hey, I’m not deciding anything about the damn tariff at issue, I’m just saying that the Constitution gives the power to Congress and this statute does not delegate that power in this case.”
Roberts has shown balls before against Trump. And he is the likeliest 5th vote. He’s shown the ability to come up with innovative ways to advance conservative values. His Trump immunity decision was a masterful way to avoid a constitutional disaster while protecting the country against presidential coups. He’s extremely hard to predict. I’m worried about his disinclination to get involved in international affairs.
So expect an appeals court ruling against Trump. Then we will see if common sense, precedent, major questions, and emergencies apply to Republican presidents as well as Democrats.
Finally, I do not know if the Court will also look at decisions by Trump on Brazil and India.
Recall that Trump Slaps Brazil With a 50 Percent Tariff Over Treatment of Political Ally
And Trump just imposed a 50 percent tariff on India because India is buying Russian oil.
Finally, the Constitution gives tariff power to Congress.
Does the Court really want Trump [any president] to invoke tariffs for any damn reason he wants?
Regarding my friend’s comment on Barrett “All she has to do is say that hey, I’m not deciding anything about the damn tariff at issue, I’m just saying that the Constitution gives the power to Congress and this statute does not delegate that power in this case.”
That logically applies to all of the justices.
Regarding alleged “national security” the Court is much more likely to let tariffs on steel continue. That is a way out for the court.
Finally, for all the moaning about “activist courts”, it would take a very activist Court to side with Trump.
If only the en banc appeals court could remove Trump and MAGA they would then be worthwhile.
The court will make Trump king in all but name, and future historians will refer to the US henceforth as Trumpistan
Will the national debt on 12/31/2025 be less than the national debt was on 12/31/2024? Not a chance in hell. Ditto for the 12/31s in 2026, 2027, and 2028, etc.
No tariffs on person-hours imported from off-shored labor.
At this point I wouldn’t be surprised by anything the SCOTUS does. They seem to have zero interest in challenging Trump irrespective of the law..
Thomas, Alito, and Gorsuch all seem pretty wedded to logic to me. I would expect them to vote that the law as written does not give Trump the power he has usurped.
Amazing what passes for logic these days.
We should avoid calling them reciprocal tariffs, as if it’s some kind of proper name.
That would be to enter Trump’s frame.
There’s nothing reciprocal about them whatsover.
Well one thing. ½ is the reciprocal of 2, it’s upside down.
Tarrifs are stagflationary at best and probably end up increasing the public debt. But the manner in which all cards are being thrown up and turned leaves one feeling that there is a possibility of positive outcomes lurking. Tough crazy cat you got.
I expect little from this tariff nonsense. I rather think that if we cherish peace, as advocated by the administration, we should look to the most free trade policies possible. If we wish to “Make America Great Again”, then cut government spending
with special emphasis on the military bullshit that has led to the bankrupt nation we have today. If illegal immigrants chafes your chaps, then make them a productive element in the reindustrialization of this nation that you wish to achieve.
No first of all you cant give tax beaks which raise the debt while expecting any tax to make a dent.
Second if i recall most of the tariff income from his first term went to bail out the farmers. Figure the same will happen this time.
I really hope come election time the republican voters who dont like trump realize he is the head of a many armed monster. Voting out republican politicians from all levels of state and federal gov.
I dont care if they vote dem or primary a republican.
Losses to the farmers will be far greater this time…
Add the taxes on fertilizers to the 25% decrease since they planted their corn and you have a huge iceberg right in front of the Farmers bow.
Crunch time for the farmers that voted for Trump and his minions…
Looks like at least 42 billion in emergency AG payments in 2025, but that’s in the big beautiful bill. The administration is talking about replenishing cow herds. They’ve been so successful at inspiring mommies to have more children, I think knocking up cows will be a piece of cake for them.
It’s an easy way for the Republicans to convince the average citizens to pay taxes. So,they’ve lowered the taxes on wealthy people immensely, and lowered taxes on middle class and poor people a bit. But, who will pay the majority of the tariffs (ie the tax on imports)? The masses (ie the poor and middle class) via higher prices. Tada, rich people win again!
Assuming a Court majority that follows the law, how long might it take for these appeals and Supreme Court decision to play out to play out? 2026? 2027? 2028? Damage to US global trade relations would be difficult to reverse by then.
More likely, the current court, which consists primarily of corrupt, gutless Trump sycophants, might be very reluctant to cross their vindictive, reactionary despot and do his bidding regardless of the law or Constitutional principles.
you can help here is how: https://www.pay.gov/public/form/start/23779454
whatever you think of Trump he did something really remarkable. If any normal politician was campaigning on and eventually implementing massive tax hike that would most likely lead to his immediate failure.
Now we have Trump who is doing this massive tax hike (lets be clear tariff is another form of taxation) and people are cheering how America is now reach and grand and we will be happy forever and our debt problem is resolved.
Make no mistake this guy is master demagogue and that is why he is dangerous.
He is on same level like Putin or even in the past Hitler. He can really move masses to his will. Once those masses realize something is wrong, it is too late already.
Putin was also loved in Russia for many years how he is a strongman leading country. Eventually it is all fine until you son is scripted to army and send to Ukraine to die when you realize something went wrong.
MPO45v2 is right, get exit strategy and be ready to abandon ship before all goes south.
The difference is that Putin and Hitler actually do/did enjoy popularity at home. Trump doesn’t. In fact, his most important base is currently being dragged up and down by his bad decisions. That’s not a great idea for a guy who desperately wants to burn his cities down with his army.
i don’t know how true that is .seems the people who voted for him would do so again. ther’es a whole eco system that kicks into gear everytime he des something to defend what he does.
I agree but its bigger than trump. Hes ask texas to give him five more seats. Why because he knows his policies are not popular. People are focusing on ca gerrymandering. When trump and all the republican party does not care how their polices affect the people. Instead of changing polices they change the districts.
Anyway what i worry about is the republican party super gerrymandering at a national level. At that point it wont matter. The system will be skewed so far to the right there will be no way to vote someone out of office. At that point politicians only answer to the wealthy who donate big bucks etc.
What I see now is Trump is confident enough that he has control over DOJ, FBI and his little ICE army. So what we see is classic mob behavior, Hotel California style. You criticize Trump and you get DOJ,FBI watching you. Bolton got a nice visit, Chris Christie got message now to stay the course of get some investigation started, same with Lisa cook. Message is clear, stay the course or we go after you. Trump is posting it all on X not for his base to know but to all his oponents to be aware. Right now lots of those opponents are still loud but I am sure soon those voices will be really muted as fear will spread.
And we only started, just 6 months into this presidency.
It’s the American consumer and small businesses that get screwed over by Trump‘s tariffs. And it’s the large businesses who get the tariff exemptions. It was Ann Krueger, the economist who came up with the term „rent seeking,“ who said that lawyers who understand tariffs and trade laws are always more keen on free trade than economists because those lawyers know the swamp created by tariffs and trade restrictions better than economists.
“Can Trump’s Tariff Revenues Help Pay for the Federal Budget Deficit?”
You’re asking this sarcastically, right?
That would be my assumption as well. Tariffs are less than 2% of total revenues. The deficit is 35% of total revenues.
Who pays the tariffs if the consumer is tapped out and can’t pay the higher price?
The importer pays the tariff, regardless of whether the product is sold or not.
His name is Mr. Recession.
You should research the ABCs of tariffs and who pays them. It’s always the importer.
If by “help” you mean using a cup to drain the pacific ocean, the answer is technically yes. You can use a cup to drain the pacific ocean but it will take a very very long time.
TACO has 1242 days left in office unless his health takes him down but Dems are already winning in strange places.
https://abcnews.go.com/Politics/democrats-celebrate-special-election-victory-iowa-state-senate/story?id=125014123
National Democrats are celebrating the results of a special election for the Iowa State Senate, after Democrat Catelin Drey won in a district President Donald Trump carried by 11 points in 2024 to break a Republican supermajority of the chamber.
Republicans argue the low turnout race won’t reflect the voters who come out to support the party in the midterms, and that the results are influenced by the Democratic National Committee’s efforts to inject national money and volunteers into the race.
Meanwhile there are Tiktok and Youtube videos of farmers and ranchers crying and screaming because they are “losing it all” due to lack of labor. Seems Trump’s aggressive gestapo now has everyone hiding and not showing up to work.
You reap what you sow suckers…next stop bankrupt city. Population: MAGA losers.
Nice to see Jacob Frey in the news for the democrats today.
NVDA is 8% of the S&P. If NVDA slumps it will drag SPX with it.
Tariffs didn’t start on Jan 1st 2025. Meaningful Tariffs started rising in the last three months. They produce $94B/Qt. They might dip in July, before rising to $400B/ $500B in 2025. Trump is a custom agent. Putin oil discount to China and India will end up in his pocket. He will collect from many countries including Brazil. Many countries want to be in the biggest consumer market in the world. They will pay the official buyer’s dividends plus cash benefits and support his policies, under the table, to Trump’s gov. Without tariffs trillions will not have poured in.
Tortured.
Can the Government pass a online law that imposes a $1 dollar surcharge everytime anyone prints or says the word “Tariff ” to the Public? Trillions could be raised by that surcharge and then average consumers would also get a break because maybe the word Tariff would then disappear from our everyday news.
Give us a Break.
Great ostrich impersonation!
I see you want to ignore what’s important and bury your head in the sand.
As a maritime consultant, (and former container shipping executive), I have done some recent work on this very topic. My source material has been looking at the tariff line item entry memorialized in the monthly Treasury reports. Based on the current data, and of course annualized and matched to the federal fiscal year (not the calendar year), the data (through June) supports the proposition that on an annualized basis, moving forward, we could. very well see an incremental $350-400 billion in Treasury revenue as a result of the tariffs. It could be more. There are many puts and takes and extrapolations that have to be made as all of this continues to be a moving target. Mish is 100% accurate that there are also many exemptions. Not included in the above number is an extrapolation for what today’s India’s tariffs will do. To the degree that they stay where they are, the above noted numbers will skew higher. How much higher remains to be seen as higher prices, eventually, lead to lower demand, and thus lower. tariff revenue. I made a speech at a container conference during Trump 1.0 and said that I felt that at the end of the day, Trump liked tariffs because he could use it to drive Treasury revenue. I stand by that assertion then and now. I have never been in the camp that views Trumps tariff policy as being focused on an American manufacturing re-birth. Trump likes the revenue, the deal making, the leverage, and the pain it causes to friend and foe alike. I think the next order of business will be to see what the Courts allow or disallow (in whole or in part) as to legal validity of the emergency powers that Trump is using to justify these tariffs. I suspect that Trump will begin to pivot and the emergency sighted will be the deficits and debt, which even the Dept. of Defense considers to be an emerging threat. Tariff revenue will not solve our deficit issue. But they will have an impact of some meaning. For this reason, I think that future administrations will find it difficult to roll-back what ever tariffs and tariff levels that become imbedded into the cake.
Those revenue streams are too big to give up and if by some judicial stupidity they get annulled then Trump can immediately put the tariffs back on through alternate acts. If asked Congress would probably back him too because that money does help attenuate the deficit. Since inflation did not surge as so many predicted it would be politically difficult to be against them. Does anybody really expect us to give back all the money collected since the tariffs were put on because if they are annulled then by law that would have to be the next step?
Exemptions can be change. The high tariff rates are the stick. Exemptions are the carrot.
Trump’s team could also cite the recent Moody’s credit downgrade as support for the emergency position.
See Betteridge’s law of headlines
He lied. Again. The simps ate it up. Again.
Exactly. It’s all about posturing.
Making a spectacle about how American problems are the fault of all the other nations of the world, and Trump is the champion of the American people who will punch back. All meaningless media theatre.
I too hope it’s struck down.
It’s about “transnational oligarch profits”. Not “national security”. There’s no threat to USA territory, economics on USA territory, free speech or other human rights on USA territory, etc. Indeed, the most proximate serious threat to Americans’ freedoms stems from D.C.
If Russia would simply reinstall a Yeltsin or if Chinese people would return to the sweatshops and leave the bulk of retail profits to Oceania oligarchs, Oceania establishment memes about trade would revert from “national security” back to “free trade benefits everyone” and “if you lose your job #learn2code”.