President Donald Trump’s aggressive tariff policy has triggered widespread economic disruption, from rising prices for American consumers to retaliatory measures from key trading partners. Yet despite the global fallout, the administration’s tariff push is delivering a surprising result at home.
As of May 30, the U.S. is on pace to set a new monthly record in tariff revenue—nearly $23 billion, about three times the amount collected in May 2024. That record-breaking pace contributes to a total of $68.23 billion collected so far in 2025, a 78 percent jump from the same point last year, according to Treasury Department data analyzed by the Penn Wharton Budget Model.
Why It Matters
Trump has defended his tariff policy as a means to restore American manufacturing as well as a way to fund the government without relying on income taxes. His administration argues that tariffs will make it possible to eventually abolish the federal income tax altogether.
The White House continues to radiate optimism that negotiated deals with other countries will occur despite Trump’s claims that he will set his own deals and a lack of clarity about how the process goes forward.
What To Know
The revenue increase is driven by steep duties imposed on imports, particularly from China, where tariff rates have climbed as high as 145 percent. The Penn Wharton analysis shows a significant monthly spike in revenue of $6.8 billion at the end of April, highlighting the impact of new levies or preemptive stockpiling by businesses ahead of expected rate hikes.
While such figures bolster the administration’s argument that tariffs can serve as a major funding source, the underlying mechanism of who pays is less direct. Tariffs are a tax on imports, meaning they are initially paid by U.S. companies at the border, but economic research shows these costs are ultimately passed on to American consumers through higher prices.
The Budget Lab at Yale University projects that the full suite of tariffs enacted in 2025—if kept in place—would raise $2.7 trillion over the next decade. However, the same analysis estimates a corresponding $394 billion reduction in other tax revenue due to negative effects on economic output. It calls the current average effective tariff rate of 17.8 percent the highest since 1934.
The Budget Lab warns that tariffs work like a regressive tax, hurting low-income families the most. It estimates that households in the second income decile would lose about $1,300 a year from higher prices, while those in the top decile would lose around $6,100. Overall, consumer costs would rise by 1.7 percent in the short term—roughly a $2,800 hit per household.
Clothing and textiles are especially impacted: prices for shoes have climbed 15 percent, and apparel is up 14 percent in the short term. The long-run impact keeps prices 19 percent and 16 percent higher, respectively.
The Tax Foundation, an international research think tank based in Washington D.C., echoes those concerns, warning that the projected $2.1 trillion in tariff revenue through 2034 will come at a significant cost: a 0.8 percent long-run reduction in U.S. economic output and 685,000 fewer full-time jobs.
Their analysis underscores the fragility of relying on tariffs to offset other costs—particularly Trump’s “One Big Beautiful Bill,” which extends and expands tax cuts from the 2017 Tax Cuts and Jobs Act at an estimated $4.5 trillion cost over the same period, or more than double the Tax Foundation’s optimistic estimate for tariff revenues.
What People Are Saying
Joseph Foudy, professor at NYU’s Stern School of Business, told Newsweek: “We’re essentially picking fights with every major country in the world. Even if we end up cutting deals, the level of acrimony and the signal that the U.S. is no longer a reliable long-term partner weakens our position.”
Todd Belt of George Washington University’s Graduate School of Political Management told Newsweek: “The industrial landscape in the U.S. has completely changed. Most heavy industry has left the country, along with many well-paying, middle-class, union jobs. That’s created a lot of resentment. Trump is promising to bring those jobs back—though I don’t think that’s realistic—and tariffs are his way of doing it”.
Scott Bessent, Treasury Secretary, in an interview with Fox News: “We were on track for a financial crash. Government spending was out of control. It felt like 1998 or 2007. We’ve pulled off that path and set up long-term growth instead.”
What Happens Next
The revenue numbers come as the legal foundation of Trump’s tariff strategy isremains wobbly. A federal court ruled that the president’s use of the International Emergency Economic Powers Act to impose some tariffs was unlawful. However, an appeals court has allowed the reciprocal tariffs to remain in place while the case winds through the appeal process. It could end up at the Supreme Court.
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