President Donald Trump is a strong supporter of tariffs, viewing them as a tool to generate revenue, challenge countries he believes are unfair in trade, and influence international behavior. Recently, he imposed tariffs on multiple foreign partners, including Canada and Mexico.
On April 2, Trump announced significant new tariffs, but after seeing a drop in the stock market, he reversed many of these actions by April 9. Despite this, he insists that tariffs are bringing in massive funds. Speaking at a National Republican Congressional Committee Dinner on April 8, he claimed, “We’re making a fortune with tariffs. $2 billion a day. Do you believe it? I was told $2 billion a day.”
Let’s examine this claim.
Claim: The U.S. earns $2 billion daily from tariffs.
Reality: This figure is inaccurate. Since Trump began raising tariffs in February, the daily customs duties collected were about $258.82 million that month. In March, the number slightly increased to approximately $263.48 million per day. U.S. Customs and Border Protection reported that due to Trump’s 13 tariff-related actions, they were collecting over $200 million daily in additional revenue.
Comparing this to the current fiscal year, which began on October 1 under President Biden, about $56.215 billion in customs duties have been collected, averaging $283.91 million daily. For this month, approximately $3.076 billion in customs and excise taxes have been reported, amounting to around $180.94 million per day.
Economists suggest that Trump’s estimate of $2 billion may stem from considering the total value of imported goods from the previous fiscal year while ignoring how higher tariffs affect market dynamics.
“It’s likely we’re collecting much less than that,” said Robert Johnson, an economics professor at Notre Dame, referring to Trump’s claim.
In the last fiscal year, the U.S. imported goods worth about $3.3 trillion. If you apply a 20% tariff to that, it would theoretically generate around $1.8 billion in revenue daily. However, this calculation doesn’t consider changes in consumer and importer behavior. As prices rise from tariffs, some importers might choose not to import certain items, and consumers may opt not to buy more expensive products.
Ryan Monarch, an economics professor at Syracuse University, remarked that expecting consumer behavior to remain unchanged is a flawed assumption.
Importantly, it’s U.S. companies that pay these tariffs, not foreign governments. The money goes to the U.S. Treasury, and those companies often pass these costs onto their customers through higher prices.
While tariffs can negatively impact foreign nations by increasing costs and affecting sales, U.S. importers ultimately bear the burden, which can lead to higher prices for American consumers.
