Name: Trump’s Tariffs Are Raking in Billions. Where Does It All Go? | WSJ
Uploaded: 2025-09-18T23:02:12.000Z
Duration: 5 min 37 s
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This is how much money the U.S. was making from tariffs when President Trump took office for the second time.

And this is how much the country is making now.

You know, we're finding hundreds of billions of dollars of cash is pouring into our country now.

He's right. The U.S. is making quite a bit of money, just not nearly enough to pay for some of Trump's ambitious goals.

Most of the tariff revenue are going to be paid by importers.

It's simply a question, then, how much of that do they pass on to consumers?

So how does the U.S. collect the billions it rakes in through tariffs?

And what does it do with all of that money?

First, let's take a look at how much the country is making.

According to the Penn-Wharton budget model, the U.S. has collected more than $159 billion in tariff revenue as of early September.

That's a 148 percent increase compared to a year ago and $642 million per day from tariffs.

While Trump has claimed the U.S. has made trillions through tariffs, that's not totally accurate — yet.

That gap will continue to grow throughout the rest of the year.

We're ultimately projecting, starting next year and for the next 10 years, that the government will collect about $2.9 trillion in revenue.

That's because Trump's tariffs are still under negotiation, and that's made predicting future demand difficult for U.S. importers.

And less demand could eventually mean less tariff revenue.

We've seen pretty wild swings in import volumes at U.S. seaports this year.

Ground zero for that has been Southern California.

That's where you have this twin port complex, the Port of Los Angeles and the Port of Long Beach.

When the Trump administration raised tariffs on Chinese goods to 145 percent in April, imports at the Port of Los Angeles plunged.

For May, there were about 655,000 containers handled at the port complex that month, which sounds like a lot, but was actually the lowest cargo volumes for about two years.

When the U.S. reduced those tariffs to 30 percent in May, while negotiations played out...

We saw another flood of cargo into the port complex, such that in July, the port complex broke a record and handled more than a million boxes in a single month.

Now let's take a second to discuss how these tariffs are collected.

Say a container worth of goods is exported from another country.

Before it's sent to the U.S., the importer files paperwork with U.S. Customs and Border Protection with details about what's coming.

Once that shipment arrives, CBP reviews the paperwork before clearing the goods for release and records exactly when the cargo hit U.S. soil.

The imports will then often move to a warehouse for storage.

And at that point, it's the importer who has 10 to 30 days to pay the tariff.

In those cases where importers have been having to pay higher tariff rates to bring goods into the country, we've seen a whole slew of actions that they've taken from talking to their suppliers about trying to drive down the rates of the goods that they've bought, asking suppliers to share in maybe a small percentage of the increased tariff rate.

And in some cases, they're also raising prices in ways that maybe consumers wouldn't even notice.

So, for example, raising the threshold for free shipping or maybe getting rid of free shipping altogether.

Once a tariff is collected, CBP sends that money to what's called the U.S. Treasury's General Fund, or America's checkbook.

At that point, it's up to Congress to appropriate that money where it sees fit.

Going forward, especially starting next year, if the current tariff rates stick around, it will raise a fair amount of revenue.

And of course, ultimately, that revenue is coming from U.S. households and U.S. firms who are essentially paying that money.

Trump has floated a number of ways to spend that cash, including potential rebate checks for some Americans or replacing the federal income tax.

There's one big-ticket item, though, that looms large.

Still, if you compare tariff revenues against the country's growing deficit, it only makes up a small fraction.

A White House spokesperson told the Journal that the tariff revenue will, quote, amount to trillions of dollars in the coming years.

This is really the first time that tariffs are being used as a revenue generator for the U.S. Treasury.

And the motivation behind that is that we're on this exploding debt path right now.

And so there has to be some revenue that comes in or some spending that goes down in order to try to stabilize the future debt-to-output ratio in the U.S. economy.

Whether Trump has the ability to impose global tariffs remains an open question.

A federal appeals court in August struck down Trump's tariffs, ruling that he overstepped his authority when using his emergency powers to rewrite trade policy.

Trump called that ruling highly partisan, and the Supreme Court agreed to hear his appeal.

Tariffs are often challenging to take back once they're implemented because a lot of domestic firms have organized around those tariffs.

And in particular, they've made investments, they've increased prices, they've done other things to take advantage of those trade barriers.

I know that there are importers out there who are waiting to see whether the court finds that the president didn't have the power to implement them.

Then they're waiting on the sidelines perhaps to apply for refunds for some of the tariffs that they've already paid.