Introduction
Introduction Statistics Contact Development Disclaimer Help
.-') _ .-') _
( OO ) ) ( OO ) )
.-----. ,--./ ,--,' ,--./ ,--,'
' .--./ | \ | |\ | \ | |\
| |('-. | \| | )| \| | )
/_) |OO )| . |/ | . |/
|| |`-'| | |\ | | |\ |
(_' '--'\ | | \ | | | \ |
`-----' `--' `--' `--' `--'
lite.cnn.com - on gopher - inofficial
ARTICLE VIEW:
Trump’s tariffs are bringing in tens of billions of dollars a month.
What’s the government doing with all that money?
By Elisabeth Buchwald, CNN
Updated:
5:48 PM EDT, Fri August 8, 2025
Source: CNN
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.
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.
What about ‘tariff rebate checks’?
If Congress gets behind Trump’s idea to redistribute tariff revenue
to Americans in the form of “rebate checks,” which Republican Sen.
Josh Hawley a bill for last week, it would cause the deficit to widen,
said Ernie Tedeschi, director of economics at the Budget Lab at Yale
and a former economist in the Biden White House.
“They’re the wrong policy to pursue right now,” he added, saying
that it could cause inflation to spike.
White House officials did not respond to CNN’s inquiry.
Tariffs could still come back to bite Americans
Even though tariff revenue may help the government’s financial
situation on paper, it’s not necessarily coming pain-free.
Businesses have, for the most part, been absorbing the higher costs
without raising prices. But that’s not the case for every business.
Appliances, toys, consumer electronics tariffs and other goods that are
sensitive to tariff changes are getting more expensive, published by
the government show. And many companies, including and , are warning of
forthcoming price hikes.
The uncertainty tied to tariffs has also more workers, leading to fewer
job openings, several economic surveys indicate.
“Tariffs are going to have a negative economic effect on the American
economy,” Tedeschi told CNN. The Yale Budget Lab estimates that
Trump’s tariffs will shave half a point off US gross domestic product
this year and next.
“That’s going to partly but not fully offset the amount of revenues
that we raise from tariffs. Because if your economy is growing less
than you thought, then, yeah, you raise this tariff revenue, but maybe
you raise a little bit less in income taxes and payroll taxes as a
result.”
Trump and his administration see it differently, however, arguing that
the recently enacted mega tax cuts and spending bill, combined with the
tariff revenue, will supercharge the US economy over time.
<- back to index
You are viewing proxied material from codevoid.de. The copyright of proxied material belongs to its original authors. Any comments or complaints in relation to proxied material should be directed to the original authors of the content concerned. Please see the disclaimer for more details.