{"id":840035,"date":"2025-04-09T08:11:43","date_gmt":"2025-04-09T13:11:43","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/04\/09\/trumps-tariffs-will-raise-much-less-than-the-white-house-says\/"},"modified":"2025-04-09T08:11:43","modified_gmt":"2025-04-09T13:11:43","slug":"trumps-tariffs-will-raise-much-less-than-the-white-house-says","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/04\/09\/trumps-tariffs-will-raise-much-less-than-the-white-house-says\/","title":{"rendered":"Trump&#8217;s Tariffs Will Raise Much Less Than The White House Says"},"content":{"rendered":"<div>\n<figure role=\"presentation\"><figcaption><fbs-accordion classname=\"expandable\" current=\"-1\"><\/p>\n<p role=\"button\">WASHINGTON, DC &#8211; APRIL 02: U.S. President Donald Trump holds up a chart at his tariff announcement <span data-ga-track=\"caption expand\">&#8230; More<\/span><span> at the White House. (Photo by Chip Somodevilla\/Getty Images)<\/span><\/p>\n<p><\/fbs-accordion><small>Getty Images<\/small><\/figcaption><\/figure>\n<p>President Donald Trump\u2019s <a href=\"https:\/\/www.whitehouse.gov\/fact-sheets\/2025\/04\/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\" data-ga-track=\"ExternalLink:https:\/\/www.whitehouse.gov\/fact-sheets\/2025\/04\/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security\/\" aria-label=\"tariffs\">tariffs<\/a> will generate far less tax revenue than the administration claims, according to a new Tax Policy Center estimate, even as import taxes disrupt stock markets and the world economy.<\/p>\n<p>Peter Navarro, a senior trade official in the White House, projected tariffs announced since January <a href=\"https:\/\/www.cnn.com\/2025\/03\/31\/economy\/tariffs-largest-tax-hike\/index.html\" target=\"_blank\" rel=\"nofollow noopener noreferrer\" data-ga-track=\"ExternalLink:https:\/\/www.cnn.com\/2025\/03\/31\/economy\/tariffs-largest-tax-hike\/index.html\" aria-label=\"would generate about $6 trillion to $7 trillion over 10 years.\">would generate about $6 trillion to $7 trillion over 10 years.<\/a> A tax increase of that magnitude would generate enough revenue to fund an extension of the 2017 Tax Cuts and Jobs Act as well as some of Trump\u2019s campaign promises, such as tax-free tips, overtime, and Social Security benefits.<\/p>\n<h2>Falling Far Short<\/h2>\n<p>But Trump\u2019s tariffs are likely to fall far short of Navarro\u2019s prediction, <a href=\"https:\/\/taxpolicycenter.org\/taxvox\/no-matter-how-congress-labels-it-extending-2017-tax-cuts-will-cost-4-trillion-plus\" target=\"_blank\" rel=\"nofollow noopener noreferrer\" data-ga-track=\"ExternalLink:https:\/\/taxpolicycenter.org\/taxvox\/no-matter-how-congress-labels-it-extending-2017-tax-cuts-will-cost-4-trillion-plus\" aria-label=\"leaving a gaping fiscal hole\">leaving a gaping fiscal hole<\/a> for Congress to fill as it tackles a major tax bill this year. TPC estimates Trump\u2019s taxes on imported goods would raise about $3.3 trillion from 2026 to 2035, plus an additional $190 billion for the remainder of 2025, roughly half of Navarro\u2019s prediction. TPC\u2019s projection excludes the effects of tariffs imposed on U.S. goods by trading partners in retaliation for Trump\u2019s import taxes.<\/p>\n<p>Several factors will significantly reduce the net revenue collected from tariffs, including:<\/p>\n<ul>\n<li>Purchasers will respond to higher prices on imported products by buying fewer of them, thus significantly reducing the amount of taxed imports.<\/li>\n<li><a href=\"https:\/\/www.cnn.com\/2025\/04\/04\/business\/china-us-tariffs-retaliation-hnk-intl\/index.html\" target=\"_blank\" rel=\"nofollow noopener noreferrer\" data-ga-track=\"ExternalLink:https:\/\/www.cnn.com\/2025\/04\/04\/business\/china-us-tariffs-retaliation-hnk-intl\/index.html\" aria-label=\"Trading partners already have announced retaliatory tariffs on U.S. goods\">Trading partners already have announced retaliatory tariffs on U.S. goods<\/a>, which would slow U.S. exports, harm domestic producers of those products, reduce employment, and lower corporate and individual income tax and payroll tax revenue.<\/li>\n<li>While some U.S. firms will benefit from tariffs, many will pay higher prices for parts and other intermediate goods, which will shrink profits, reduce employment, and also lower domestic tax revenue.<\/li>\n<\/ul>\n<p>TPC\u2019s analysis includes the effects of lower income and payroll tax revenues. However, it does not estimate the effects of retaliation or how much an expected decline in corporate profits and wages would slow the economy. If it did, tariff revenues would be even lower.<\/p>\n<h2>Paying For Tax Cuts<\/h2>\n<p><a href=\"https:\/\/taxpolicycenter.org\/tax-model-analysis\/extending-provisions-tax-cuts-and-jobs-act\" target=\"_blank\" rel=\"nofollow noopener noreferrer\" data-ga-track=\"ExternalLink:https:\/\/taxpolicycenter.org\/tax-model-analysis\/extending-provisions-tax-cuts-and-jobs-act\" aria-label=\"The Tax Policy Center estimates\">The Tax Policy Center estimates<\/a> extending the TCJA would add $4.4 trillion to the national debt over the next decade. Interest on the additional debt would cost another $800 billion. Tax-free tips would <a href=\"https:\/\/taxpolicycenter.org\/fiscal-facts\/tax-free-tips-how-would-they-impact-tipped-workers\" target=\"_blank\" rel=\"nofollow noopener noreferrer\" data-ga-track=\"ExternalLink:https:\/\/taxpolicycenter.org\/fiscal-facts\/tax-free-tips-how-would-they-impact-tipped-workers\" aria-label=\"cost at least $6.5 billion\">cost at least $6.5 billion<\/a> in 2025 alone, while exempting Social Security benefits from tax <a href=\"https:\/\/taxpolicycenter.org\/taxvox\/trumps-social-security-benefit-tax-repeal-would-lower-taxes-accelerate-program-insolvency\" target=\"_blank\" rel=\"nofollow noopener noreferrer\" data-ga-track=\"ExternalLink:https:\/\/taxpolicycenter.org\/taxvox\/trumps-social-security-benefit-tax-repeal-would-lower-taxes-accelerate-program-insolvency\" aria-label=\"would reduce federal revenues by $1.5 trillion\">would reduce federal revenues by $1.5 trillion<\/a> over a decade.<\/p>\n<p>The Senate is considering a budget framework that would <a href=\"https:\/\/bipartisanpolicy.org\/explainer\/whats-in-the-fy2025-senate-budget-resolution\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\" data-ga-track=\"ExternalLink:https:\/\/bipartisanpolicy.org\/explainer\/whats-in-the-fy2025-senate-budget-resolution\/\" aria-label=\"cut taxes by about $5.3 trillion\">cut taxes by about $5.3 trillion<\/a>. If not offset by tariffs or other tax increases, or by substantial cuts in federal spending, the Senate fiscal plan would <a href=\"https:\/\/www.crfb.org\/blogs\/whats-senates-concurrent-fy-2025-budget\" target=\"_blank\" rel=\"nofollow noopener noreferrer\" data-ga-track=\"ExternalLink:https:\/\/www.crfb.org\/blogs\/whats-senates-concurrent-fy-2025-budget\" aria-label=\"increase the national debt to 134 percent of Gross Domestic Product i\">increase the national debt to 134 percent of Gross Domestic Product i<\/a>n a decade.<\/p>\n<p>The $6 trillion in new revenue Navarro claims may come from some simple math. The U.S. imported about $3.3 trillion in goods last year. Twenty percent of that (a rough estimate of all the Trump tariffs) is about $600 billion annually, or $6 trillion over a decade.<\/p>\n<h2>Conflicting Goals<\/h2>\n<p>Simple. But wrong. That gross number ignores the economic impact of tariffs and glosses over Trump\u2019s conflicting goals.<\/p>\n<p>If higher tariff-driven import prices reduce demand for foreign products, Trump will achieve his aim of boosting U.S. production. But if demand for those goods falls, so will tariff revenue.<\/p>\n<p>By contrast, if U.S. buyers continue to purchase imports regardless of higher prices, the tariffs would raise a substantial amount of money. But Trump would fail to achieve his <a href=\"https:\/\/www.whitehouse.gov\/fact-sheets\/2025\/04\/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\" data-ga-track=\"ExternalLink:https:\/\/www.whitehouse.gov\/fact-sheets\/2025\/04\/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security\/\" aria-label=\"vow to grow U.S. manufacturing.\">vow to grow U.S. manufacturing.<\/a><\/p>\n<p>A third outcome is that Trump and U.S. trading partners eventually agree to lower tariffs, which would reduce revenue from the import tax but also soften the blow to U.S. businesses, consumers, and workers.<\/p>\n<h2>Washers And Autos<\/h2>\n<p>Trump\u2019s tariffs not only will raise the cost of imports but also result in higher prices on competing domestic goods, reducing after-tax incomes of consumers of those products.<\/p>\n<p>For example, when Trump raised tariffs on washing machines in his first term, <a href=\"https:\/\/www.aeaweb.org\/articles?id=10.1257\/aer.20190611\" target=\"_blank\" rel=\"nofollow noopener noreferrer\" data-ga-track=\"ExternalLink:https:\/\/www.aeaweb.org\/articles?id=10.1257\/aer.20190611\" aria-label=\"would generate about $6 trillion to $7 trillion over 10 years.\"00>prices of imported washers predictably went up<\/a>. But so did prices of domestic washers and even of dryers, which were not even tariffed.<\/p>\n<p>Similarly, higher prices on imported cars and parts will have cascading effects that are likely to slow the U.S. economy and lower tax revenues.<\/p>\n<p>Tariffs on imported vehicles and parts will raise the cost of new domestic autos, which include foreign components. And higher costs for replacement parts also means repairs on foreign and domestic vehicles will cost more. As those expenses rise, so will automobile insurance premiums.<\/p>\n<p>Breaking supply chains, where components often cross borders multiple times, also means less work for U.S. parts suppliers, truck drivers, and the businesses that service them&#8211;from gas stations to restaurants.<\/p>\n<p>Eventually, the U.S. economy will adjust to higher tariffs. But that will take many years.<\/p>\n<p>Until then, the negative effects of import taxes such as rising unemployment and a slowing economy will drain trillions of dollars from the revenues the administration hopes to raise. And it will leave the president far short of paying for the tax cuts he demands.<\/p>\n<\/div>\n<p><a href=\"https:\/\/www.forbes.com\/sites\/howardgleckman\/2025\/04\/08\/trumps-tariffs-will-raise-much-less-than-the-white-house-says\" class=\"button purchase\" rel=\"nofollow noopener\" target=\"_blank\">Read More<\/a><br \/>\n Howard Gleckman<\/p>\n","protected":false},"excerpt":{"rendered":"<p>WASHINGTON, DC &#8211; APRIL 02: U.S. President Donald Trump holds up a chart at his tariff announcement &#8230; More at the White House. (Photo by Chip Somodevilla\/Getty Images) Getty Images President Donald Trump\u2019s tariffs will generate far less tax revenue than the administration claims, according to a new Tax Policy Center estimate, even as import<\/p>\n","protected":false},"author":1,"featured_media":840036,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[272,163],"tags":[],"class_list":{"0":"post-840035","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-tariffs","8":"category-trumps"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/840035","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=840035"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/840035\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/840036"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=840035"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=840035"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=840035"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}