US President Donald Trump has claimed that tariffs imposed on trading partners could bring in more than $1 trillion in a year to the country. He has also claimed that the move would reduce national debt. But is a there any truth to this?
"You are going to see billions of dollars, even trillions of dollars coming into our country very soon in the form of tariffs," Trump said a week ago.
Experts, however, beg to differ. Some of the economists fear that the tariffs could force consumers to avoid splurging on foreign goods as the companies would hike prices to pass the cost to customers, according to CBS News.
Some of Trump's claims have been contradicted by his own officials. After imposing 25 per cent tariffs on automobiles and components imported to the US, Trump claimed that the US exchequer would earn "from $600 billion to $1 trillion" in a year. However, a while before Trump's remarks, White House staff secretary Will Sharf has said the tariffs would bring in $100 billion revenue.
However, The Yale Budget Lab, a think tank, has suggested that just $60 to $65 billion could be raised by the auto tariff annually.
According to the US Bureau of Economic Analysis, the country imported $3.3 trillion goods in 2024. If Trump imposes 50 per cent tariff on every country, it can only raise around $780 billion in a year, as per the Peterson Institute of International Economics.
The Institute also adds that even a 50 per cent tariff on imported goods would not be able offset 40 per cent of the $2 trillion generated from income tax.