Let’s discuss Trump’s tax hike on US consumers and businesses. 
Effective Tariff Rates and Revenues
Please consider the Penn Wharton Effective Tariff Rates and Revenues projection as of September 10, 2025.
Key Points
- New tariffs have raised $80.3 billion in revenue between January 2025 and July 2025 before accounting for income and payroll tax offsets.
- The average effective tariff rate increased to 9.75 percent in July, up from 2.2 percent in January.
- Among major trading partners, China faces the highest tariffs, with effective rates reaching 40 percent in July.
- Steel and aluminum products are the most heavily tariffed product category at 41.2 percent, followed by automotive vehicles at 22.
Effective Tariff Rates on Product Categories
The above chart is instructive. Steel and aluminum tariffs impact US manufacturers the most.
Those imports are intermediate goods used in manufacturing. It will be years, if ever, for this production to return to the US.
Effective Tariff Rates on Key Trading Partners
Tariff Simulator by Year
Please consider the Penn Wharton Revenue and Prices Tariff Simulator.
PWBM estimates that the Combined Trump Tariffs will generate $3.0 trillion in revenue over 10 years, using recent time-varying demand elasticity estimates. This corresponds to a reduction in imports by over 21% or $8.0 trillion due to higher prices on imported goods paid by US consumers and firms. If baseline import demand in the United States across all goods and services further stagnates over the next decade due to lower economic growth, total new tariff revenue will decrease to $2.7 trillion
Donald Trump Estimates
Donald Trump has repeatedly claimed that his proposed and implemented tariffs would generate massive revenue for the U.S. government, often framing them as a way to pay down the national debt, fund tax cuts, or even replace income taxes entirely. Based on his public statements, here are the key figures he has cited:
- Trillions of dollars over the next decade: Trump has stated that tariffs would raise “trillions” in revenue, aligning with his broader vision of using them to offset fiscal deficits and supercharge the economy. For instance, in August 2025, he claimed his tariffs had already “collected trillions in revenue,” though this appears to exaggerate short-term collections (actual 2025 tariff revenue through August was around $100–$150 billion, per Treasury data). Independent projections, such as those from the Congressional Budget Office (CBO), estimate that his full tariff regime could generate $2.5–$4 trillion over 10 years (2025–2034), which Trump has echoed as a realistic outcome in interviews.
- Hundreds of billions annually: In March 2025, Trump said tariffs would bring in “hundreds of billions of dollars,” adding that the U.S. would “become so rich you won’t know where to spend all that money.” This matches statements from his Treasury Secretary, Scott Bessent, who projected $300 billion per year starting in 2026.
- $50 billion per month (or $600 billion annually): Administration officials, including Trump, have cited expectations of $50 billion monthly from broad tariffs (e.g., 10–25% on most imports), which would total around $600 billion yearly. Trump referenced this in August 2025 discussions about using the funds to reduce debt “in very large quantity” and potentially issue “dividend” checks to Americans.
- $2 billion per day: In April 2025, Trump claimed tariffs were already generating $2 billion daily ($730 billion annually), but this was debunked as an exaggeration—actual daily averages at the time were closer to $192 million.
Trump’s rhetoric often emphasizes these figures without detailing economic trade-offs, such as higher consumer prices (estimated at $1,300–$1,700 per household annually by the Tax Foundation) or potential GDP reductions (up to 6–8% long-term, per Penn Wharton models). Actual 2025 collections have surged (e.g., 78% year-over-year to $68.9 billion in the first five months), but they remain a fraction of total federal revenue (about 2.7–5%) and far from replacing income taxes ($3.6+ trillion yearly).
The above from Grok AI.
Tax Foundation Estimates
Please consider the Tax Foundation report Tracking the Economic Impact of the Trump Trade War
Altogether, Trump’s imposed tariffs would raise $2.3 trillion in revenue over the next decade on a conventional basis ($1.5 trillion on a dynamic basis) and reduce US GDP by 0.9 percent, all before foreign retaliation.
However, if the IEEPA tariffs are permanently enjoined [blocked by the Supreme Court or Congress], it would reduce the total revenue raised by Trump’s tariffs on a conventional basis by $1.8 trillion to $573 billion over 10 years and reduce the negative GDP effect to 0.2 percent.
Committee for a Responsible Budget Estimates
Finally, please consider the August 2025 CRFB Budget Baseline
- Debt held by the public will rise from about 100 percent of Gross Domestic Product (GDP) ($30 trillion) today to 120 percent of GDP ($53 trillion) by 2035.
- Deficits will total $22.7 trillion (6.1 percent of GDP) over a decade and rise from $1.7 trillion (5.6 percent of GDP) in 2025 to $2.6 trillion (5.9 percent of GDP) in 2035.
- On August 22, CBO estimated recent tariffs would generate $4.0 trillion of total deficit reduction from 2025 through 2035 on a conventional basis, which is the equivalent to roughly $3.5 trillion from 2026 through 2035 on a dynamic basis. Incorporating these figures would slightly but not meaningfully reduce our deficit and debt projections.
Reducing the Debt
Trump proposes to use tariffs to reduce national debt and to give dividends to taxpayers.
The notion is mathematical idiocy because the US is running close to $2 trillion deficits annually.
Even factoring in huge tariff revenue, deficits are projected to be at least 1.5 trillion in all of the models.
Thoughts on the Models
One of the problems with all the model projections is they ignore the increasing chance that tariffs tip the economy into recession.
Recession or not, it is certain that tax hikes will slow the economy.
Tariffs are an extremely poor way to raise revenue. They hit consumers and small businesses the most.
To the extent tariffs are collected, they constitute a tax hike on US consumers and businesses.
It’s not just a matter of bragging about tariff revenue (sure to plunge when recession hits), but the dynamic impacts of tariffs will reduce growth and tax collection across the board.
The most amusing aspect of this is Republicans are now bragging about tax hikes and slower economic growth.
When the SHTF (Sh*t Hits the Fan), and that already seems to be happening, Trump will blame his mistakes on Fed and Biden.
Actual vs Predicted Consumer Sentiment Is a Big Hoot
Please see my September 8, 2025 post Actual vs Predicted Consumer Sentiment Is a Big Hoot
Economists think people should be happy. They aren’t.
Economists think people should be happier because like the Fed, they are clueless about inflation.
Real wages are down over the last four years no matter what the economists think and the BLS says.
And now tariffs are destroying jobs.
Related Posts
September 3, 2025: The Unemployment Level Is Now Greater than Job Openings
For the first time since the pandemic unemployment is above openings.
The nonfarm payroll response rate is 42.6 percent with the same issues as with JOLTS
September 4, 2025: Year-Over-Year Small Business Employment Growth Barely Above Zero
ADP reports the total YOY small business growth as +19,000.
September 5, 2025: Jobs Report Misery: Only 22,000 Gain in August, June Revised to -13,000
August was a bad month for job seekers. Here are the grim details.
September 5, 2025: Since January 2023, BLS Jobs Revisions Were Negative 24 Out of 31 Times
Witness negative revisions 77 percent of the time, with more coming.
September 9, 2025: New QCEW Data Indicates More Big Negative Revisions Coming to Job Reports
The discrepancy between jobs reports and quarterly data widens again.
Regarding the asininity of steel and aluminum tariffs, please see Trump’s Aluminum Tariffs Seriously Backfire Already
Tariffs did not and will not bring production back to the US.
The economy is now cooling rapidly. And tariffs are part of the reason. Small businesses are going to get clobbered.
Tariffs revenue neared $30 billion this August — the first month of Trump’s full ‘reciprocal’ tariff regime
$30 billion. Doesn’t sound like a good enough reason to screw over US manufacturers, who are paying those tariffs and increasing their input costs.
His tariffs during his first term pretty much went to support the farmers who business he tanked and whos votes he needed.
Prob the same this term. Its almost like should have left things the way they are. We would be better off.
O dont get the make america great again. Instead of looking a saying this is where were at. How do we get better in the future. The republican party wants to take us back to the 50s to a world that dies not exist anymore.
With the tariff scheme just getting underway — which leads to speculation when it will end, if ever — it becomes clear that populist politics stands for a closing of borders and perhaps a closing of minds.
With regards to the latter, when we engage with the world through trade, we often learn something new about other peoples. Without robust trade, a society based on business becomes clueless, irresponsible, and unmotivated to learn. Cultural interchanges disintegrate and fragment.
I believe trade, not tariffs, is the best way to form a more cosmopolitan mentality better suited for these globalized times we live in.
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dark . sport . blog Is my website — come visit for more writings by me!
You used AI to write this. See me after class.
Mish! Get rid of this clown!
Trump knows full well he can run his mouth forever with BS and 90% of the people he wants to swear by his word will do exactly as they are told and believe what he wants them to believe. Truth doesn’t matter.
back to cutting of your nose…
..China has quietly imposed de facto sanctions on the US semiconductor industry by restricting exports of critical minerals such as gallium and germanium. This move has widened the technological gap in military radar systems….
and
…Camba adds that the US has also pursued “friendshoring” partnerships with allies such as Canada, Australia, Japan, and South Korea to diversify its supply chains. Despite those efforts, he points out that domestic refining remains limited, with new facilities taking 10–20 years to become operational, a challenge compounded by investor hesitancy, high capital costs, and environmental opposition.
Does anyone notice the list of countries we are supposedly “friendshoring” with?
Which of those, due to US action in the last few months, is a closer “ally” than before?
After the RE bust and the ev bust the last thing Shi needs is high unemployment
and higher energy cost. Chinese mfg were ordered to absorbed tariffs. The banks were ordered to keep zombie co alive. China imports LNG from Australia Nerd #1 and from Qatar Nerd #2. Santa from Yamal NG in the north pole.
https://www.bloomberg.com/news/articles/2025-09-11/china-mulls-helping-local-governments-with-1-trillion-of-bills?srnd=phx-economics-v2
Tariffs are just another tax on the American taxpayer. The taxes are paid by businesses and individuals. And many will argue that businesses just pass through their taxes to the individual anyway. It is often said that ultimately, there is only one taxpayer.
However, there is a way for “some” of these taxes to be paid by by non Americans. Exports.
When US companies export their wares, earn profits, and pay taxes on those profits, one could argue that some of the taxes paid to the US govt are coming from outside America.
So if a farmer sells his soybean crop to China, makes a profit, then pays taxes on the profits, the taxes are being paid by China. A simplification, I admit.
To increase the amount of tax paid by foreigners, we need to make our businesses the most competitive, lowest cost businesses in the world who export huge amounts of goods and services, and make huge profits from them.
One way to do this is to reduce business input costs as much as possible, which will increase profits.
When businesses pay tariffs to the govt, those are taxes on their inputs, not on their profits. So the US soybean farmers pay tariffs on the fertilizer they import, which raise their costs, and reduces their profit.
Similarly, US manufacturers are paying 50% tariffs on inputs of steel, aluminum, copper, machinery, parts etc. This makes them less competitive, reduces exports, reduces profits, and reduces the amount of tax that foreigners contribute to the US govt.
“One way to do this is to reduce business input costs as much as possible, which will increase profits.”
The largest input costs of most businesses is payroll. It counts for 30% of costs with in some instances up to 70%. If you lower wages or at least keep them low then your profits will soar. Tariff costs are peanuts comparted to the possibilities of higher profits if you can lower labor costs. If profits are you measure of success then that is the way to go.
Care to give an industry breakdown?
For US produced automobiles, labor costs are 10-15 percent. Materials and parts are 40-50 percent.
Depends on the manufacturing sector and usually is between 15% and 30% of costs. The tariffs have increased material costs in overall manufacturing by about 2% or a touch more. I said if you really want to improve profits then the variable is labor costs since they are 20% of the costs and unlike materials labor cost they depend on internal economic policies and not international markets. If tariffs go to zero you don’t gain much but if you get labor down then it flows to the bottom line. There are a few ways to do it and some of them do not involve cutting wages or importing cheap labor from other countries.
Sounds like you just want to cut jobs.
Here is another sector. Agriculture makes up 10% of our exports. Labor makes up just 10% of agricultural costs.
It’s hard to cut costs in many sectors, in order to boost exports and profits. It’s easy to cut tariffs.
Yet you keep looking for any way to cut costs other than tariffs. Why not just cut the tariffs?
At is the most labor efficient industry but you can still cut labor in parts that are less mechanized.
For reasons I have already said. We need more industry in critical areas and tariff protection can help in that.
I don’t mind if we support critical industries. It’s just that tariffs are a stupid way to do it.
Look at aluminum. 50% tariffs will encourage Century aluminum to add 50,000 tons of annual production. That’s equal to 1% of imports. And they are looking to build a new smelter; possibly; maybe; if they get enough money from the govt.
And the only reason that Century will do this is because they can sell their aluminum at close to 50% higher prices. Which will screw all the US manufacturers that use that aluminum.
So tariffs accomplish 1% more aluminum and hurt American manufacturing.
The tariffs have raised a little money, but not enough to make up for Trumps reckless spending and tax reductions for the rich and corporations.
For businesses tariffs have been the largest regulatory action of the century. They are blatant attempts to force or coerce businesses to re-locate into higher cost labor markets with more expensive raw materials.
The more expensive labor and materials make products uncompetitive globally and raise costs for consumers at home. Tariffs anti-competitive and drive global markets away fro the use of the dollar as a global reserve currency. This weakens America significantly.
On the political front they have driven our largest enemies/competitors together and isolated the US. China, Russia, India and virtually all of Asia is now shunning American products and turned Asian consumers against the US.
Trumps statements “I’ve made 200 deals” & “They are kissing my ass” turned out to be absolute bullshit and combined with his constant flipping of tariff levels back and forth as well as TACO cost him valuable credibility.
Many nations are simply ignoring Trumps tariff tantrums, giving him the finger and not even returning his calls.
History had shown tariffs to be incredibly divisive forms of taxation, they hurt and isolate the nation that declares them and drive competition together. None of the evolving disaster that is looming for US trade is caused by others. It is solely of Trumps making.
Trump has repeatedly lied that the “Tariffs have already raised trillions”. Every American knows this is not true and that it is another example of Trump lying. Americans know that Trump lies about everything. Americans also know that Trump is lying about his relationship with Epstein and that he has engaged in trafficking and sexual acts with under age girls.
Lies, lies and more lies from a coercive, bullying predator.
Sadly for America, Trump keeps himself in a bubble of self-deception and surrounds himself with sycophants and FOX News spokesmodels. Trump is out of touch with the majority of America and is actively over-regulating small businesses to death.
Small businesses are the economic engine of rural and small town America.
Farmers are seeing their crops rejected and grain prices fall while imported fertilizers soar in price.
Who does Trump work for?
Bullies have a way of bringing others on the school yard together to gang together and pound the shit out of the bully. It is happening on a global basis, and the results are a staggering loss to American leadership and our relationships with our former allies and enemies.
Again, Who the hell does Trump work for?
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Israel
The Palestinian’s leaders will recognize Israeli right to exist. The Israeli gov will do the same. Both will live in one state, a holy state, after extracting Hamas cancer. Without Bibi it couldn’t have been done. Both don’t need your permission and recognition. U are garbage.
Niet.
Go ask a “Department of War” procurement officer where the rare earths are going to come from for our weaponry and sophisticated electronics?
OOPS! Trump did not stockpile them before declaring war on the rest of the world… Despite his advantage of a first term to do it…
What a “Dumbass”…
The DOW will pay Hezbollah fighters $5K for every AK47 and $20K for heavy weapons. 5 US army bases in Lebanon will collect the weapons. The US, Qatar, Turkey and the Europeans will rebuild southern Lebanon and the Bekaa Valley to separate them from Hezbollah leaders. Bibi and Trump dismantled the evil axis: China, Russia and Iran. The SCO and Beijing military parade were a smokescreen that didn’t change the ME reality.
Keep take the meds, clearly they are not yet at the required dosage.
The effective tariff rates: China’s 40% lifts the rest. Chinese exporters absorb most of the cost, not the US consumers.
Bullshit!
bs?? Most Mish charts are flat chest, hard to identify and separate. The effective rates on key countries chart is a good a good one. Chines exporters at 40% will pay the most.
China’s exporters pay NOTHING! Tariffs are paid by the importer and passed on the the consumer…
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Arithmetic raped and left for dead.
Tariffs (taxes) do one thing and one thing only: they take your money and give it to the current government. The dual-national antisemite zionist-infested government uses your money to enable israel to kill and destroy foreign peoples who were not attacking America but who now hate you because your government is killing them directly or indirectly via israel.
Tariffs do not get you free or at least better health care. Our property taxes and insurance costs are not being lowered. Trump did not reduce our income tax.
CNBC, FOX NEWS, CNN, whatever: No MSM outlet says the above.
Tariffs only DESTROY America. And here you all are, only discussing what number will change where, when said numbers are codifying the death of your country, your family, your life, your sanity, your existence.
You are killing us.
“Tariffs hit consumers and small businesses the most…they constitute a tax hike on US consumers and businesses.”
Said taxes fund your death.
Property taxes high? Thank a teacher.
You mean my ex. No thanks.
I think the school funding tax plan was/is a method to insure than the wealthier neighborhoods receive greater funding and the poor neighborhoods receive less. As with most political and tax structures in the US the real divide isn’t just racially but economically.
And a cop! And firefighter, water and sewage worker, road maintenance worker, trash collector, etc…
The dual national antisemitic zionist infested gov use your money to kill terrorists,
who slaughtered innocent people like in Sept 11 2001. Their Bin Ladens are dead.
Bin Laden was a CIA asset. A terrorist funded by my taxes. Hamas was funded and created by Israel. Again, with my tax monies. Thesis-antithesis-synthesis much?
Arafat got his Palestinian state. Hamas took over in a bloody coupe. The pacified Hamas was funded, but instead of building Jasa economy they built an army, a 600 miles subway system and a missile force. Hamas perpetuated their Sept 11 on Oct 7 2023. Hezbollah on Oct 8. Syria in the north, Iraq and Iran in the east and Yemen from the south. And u are dancing bc an assassin killed Charlie Kirk.
Why would you say such things about how I feel about the death of Charlie Kirk? It’s not normal.
For the rest, the Jewish State collaborated with Hamas in the October 7 attacks. The Israelis knew about it and even ignored their own Jewish soldiers’ reports warning about suspicious Palestinian activity at the front lines.
Then your Israelis fired point blank into Jewish houses flechette-bearing tank shells which shredded their own Jewish citizens to pieces. Then the Jewish administration falsely claimed the Palestinians had tortured Jews to death. How would they have the time to commit such atrocities whilst fighting for their lives against the mighty Israeli army?
FDR possibly knew about Pearl Harbor. Bibi possibly knew about Oct 7. After getting his casus beli he peeled and dismantled Iran’s cauldron. Most Israelis don’t understand that under Kellogg-Briand u need a cause. Kellogg-Briand was a notary for France and GB to rule the world.
Hamas raped, murdered, dismembered babies and kidnapped hundreds in the first few hours of their fantasia. It took three weeks to extract them. During that period the IDF lost 850 special forces soldiers. When done, the IDF is fought 7 nations which tried to force Israelis to swim in a sea of blood and to eliminate the zionist state.
I guess you think that Hamas and Gazans are really dumb and are incapable of mounting a surprise operation against Israel. Why you must think they are so low IQ that their rockets just had to be furnished and installed by Israel as well. If you believe that then your contempt for Gazans would be well-founded.
Indeed Hamas couldn’t breath without the Israelis knowing about it. Technology + small territory = no surprises
Let’s not forget the Dancing Israelis (Mossad agents) on 9/11 either. Netanyahu: “9/11 was good for Israel”
https://youtube.com/shorts/oCLLYGjK4Fg?si=gjrdmc2olmzhQP0S
The dancing Palestinians.
WABC and WCBS NYC shown on Sept 11 2001 Palestinians dancing in Trenton NJ capital building. Scott Ritter and col MickeyD kept lying to ignorant people for three years.
Promise a legacy Republican to lower his taxes and he will accept everything else without a whimper.
Democrats = Republicans
Bravos Research had an interesting video out on why inflation has been relatively tame with the tariffs. Makes a good case that housing crash and low energy prices have offset most of the tariff inflation. If the Fed lowers rates and that re-ignites housing or energy surges then we’ll likely see huge inflation spikes. Either way, it’s not going to be good.
https://www.youtube.com/watch?v=NkOr-riTHoc
FOMC coming right up….
So where’s the disconnect in the financial markets because they see nothing but smooth, rarefied air in front of them. Relentless optimism. Tariffs or not. Inflation or not. War or not. Political assassinations or not.
Seeing as the BLS is now being “investigated” I’d say SHTF is looking more and more like “oops the army is occupying ALL towns!” followed by the most blatant banana republic book cooking you’ve ever seen. Neither of which will work of course, but that’s not going to stop him from trying his best now that he’s got nothing to lose. I mean, the pictures of Epstien at Mar-A-Lago basically seal that deal.
Can an importer raise a price due to a tariff?What happens when the tariff cannot be passed on?
Seriously, now
BK–who runs a business to impoverish themselves?
Tariffs are basically a wealth transfer mechanism from the private sector to the federal government. Since it is the private sector that generates the revenue to fund itself plus government, transferring funds to government means less for the private sector. That means a combination of its standard of living and profits contract, meaning less tax revenue for government than expected.
This tariff program is another mechanism to kick the problem down the road, not solve it. In order to make a dent in the problem, the revenue must be in excess of the deficit, otherwise the debt still grows so the problem still gets worse just slower for a short time, then back to geometrically. We have a spending problem and accounting or tax gimmicks will not hide it any longer. The only repair even though it is politically unpopular, is to spend less than revenue and apply the difference to the debt.
Got popcorn?
Got puts?
What a show!
How much of the tariffs are and will be paid by the US consumer?
More and more, as time goes on-what compny ever cut profits for it’s customers
But customers prefer to be boiled slowly
Customers always pay everything. Including deficits from high gov spending…
No one wants to pay more taxes to fund the MIC, genocide, and optional wars.
But if you raise taxes to “bring back our jobs”, maybe some voters won’t ask too many questions….
Or as Dubya once said during a lighter moment: You can’t fool all the people all the time. But you can fool half the people all the time. Those are the people you want to focus on.