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Lutnick claimed that the US is imposing tariffs worth close to $30 billion each month during an interview on CBS’s Face the Nation on July 20. You must remember that this will cover our deficit. He claimed that this will strengthen America.
However, the math is not strong.
The 10-year costs of President Donald Trump’s new tax-and-spending legislation, much less all federal deficits from that time, would be multiplied by a full decade. According to what the Trump administration has said, the current tariffs are expected to go up on August 1 and include levies ranging from 20% to 40% for 21 countries.
According to a study conducted by the Congressional Budget Office (CBO), which is the nonpartisan number-crunching arm of Congress, 10 years of tariff revenue increases under Trump won’t cover the additional deficits from his bill or the overall deficits over the next ten years. The bill’s projected added deficit is $3.4 trillion, a significant increase from the $1.8 trillion deficit that is already projected over the next ten years.
According to Steve Ellis, president of Taxpayers for Common Sense, a group that monitors the federal budget, “I can’t envision a scenario where the tariff revenues eliminate the deficit.”
A comment request for this story was not received by the White House.
What percentage of Trump’s tariffs are US citizens claiming?
Under Trump’s more aggressive tariff policies, the federal government has been generating higher tariff revenues. The current tariffs include additional tariffs on some products, such as steel, at the bare minimum of 10% for all nations. According to economists, consumers will ultimately accept the tariff increases.
The Penn-Wharton Budget Model’s analysis of federal tariff revenue revealed that the federal government had collected about $100 billion in tariffs so far this year up until July 11. Prior to Trump’s election, the federal government collected less than $48 billion in tariff revenue during the same time period.
According to the Treasury Department, the federal government incurred $ 27 billion in tariffs in June 2025, according to the most recent monthly data. That figure was $6 billion a year earlier. Due to Trump’s trade policies, that’s an increase of $ 21 billion per month.
The government would generate $ 2.52 trillion in tariff revenue if it continued to collect tariff money at the rate of $ 120 per month as it did in June 2025.
That is in line with what the CBO released in June. CBO predicted that the increase in tariff revenue would reduce total federal deficits by $2.8 trillion over the course of ten years, taking into account the potential economic shrinkage caused by higher consumer prices and tariffs.
How does the federal deficit compare to the tariff revenues?
The baseline projection for the cumulative deficits over the next ten years is almost $ 21. 8 trillion, excluding the deficits from the recently signed bill that Trump signed. That is roughly seven times the CBO’s anticipated tariff revenues for the same period.
And Trump’s anticipated tariff revenues won’t fully cover the “megabill” Trump signed’s additional deficits. The law signed on July 4 will increase deficits by $3.4 trillion over the next ten years, exceeding CBO’s forecast for tariff revenue, according to estimates from CBO.
Because he has frequently announced and then put higher tariffs on hold, there is uncertainty about how much tariff revenue Trump’s policies will generate.
Ellis remarked, “It’s difficult to know what the end goal is.” Is it possible to generate revenue from high tariffs, which would reduce economic activity, or to rebalance the trade and, in turn, to lower tariffs, leading to lower economic activity?
The Committee for a Responsible Federal Budget, a fiscally hawkish organization, has noted that Trump’s tariff policies have been challenged in court, and that the administration’s initial decision, the Court of International Trade, was in conflict with the original.
Trump would lose the authority to unilaterally enact many of the tariffs he has been imposing, and the new tariff revenues that are currently being generated would largely dry up. If the initial ruling is upheld on appeal, this will largely dry up.
And even if Trump’s tariffs are upheld on appeal, his successor could do so by executive order, resulting in tariff revenues that would not only cover the next four years but also the following ten.
Our decision
According to Lutnick, tariffs “will pay off our deficit.”
Estimates are difficult due to Trump’s on-again, off-again pattern of implementing tariffs. However, two forecasts indicate that the Trump administration’s tariff revenues won’t be able to cover the projected deficits for the following ten years.
A back-of-the-envelope calculation based on the tariffs collected in June 2025 would amount to $ 2.52 trillion, according to the CBO, while it anticipates $ 2.8 trillion in tariff revenues over the next ten years.
The nearly $ 22 trillion in cumulative deficits projected over the next ten years is only a small portion of what these figures represent.
Source: Aljazeera
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