MARY LOUISE KELLY, HOST:
President Trump's tariffs are starting to raise real money for the federal government. If that keeps up, forecasters say it could put a meaningful dent in the federal debt - emphasis on could because that forecast comes with a number of caveats. NPR's Scott Horsley is here to explain. Hey there.
SCOTT HORSLEY, BYLINE: Good afternoon.
KELLY: How much money are Trump's new tariffs bringing in for the government?
HORSLEY: Treasury data show that as of Tuesday, tariffs had raised close to $70 billion for the government so far this year, a lot of that just in the last couple of months, since early April, when the president started taxing nearly everything we import. Even here in Washington, $70 billion is real money...
KELLY: Yeah.
HORSLEY: ...And it's a real break from recent history, according to Shai Akabas, who's been tracking the tariff revenue at the Bipartisan Policy Center.
SHAI AKABAS: Historically, tariffs have made up a very small portion of the revenue that the federal government brings in on an annual basis. Last year, tariffs were roughly 2% of overall government revenue.
HORSLEY: Tariffs are on track to at least double that this year, and the White House is trumpeting a forecast from the Congressional Budget Office that says tariffs could shave $2.8 trillion off the federal debt over the next decade, which would roughly offset the cost of the big, House-passed budget bill if the tariffs in effect earlier this week remain in place for 10 years. However, that is a big if.
KELLY: The if is doing a lot of work. And why? What could change in that outlook?
HORSLEY: Well, there are legal challenges that could undo a lot of these tariffs. Congress might get involved at some point. And Trump himself keeps changing the tariffs from week to week, sometimes day to day. So Adam Hersh of the Economic Policy Institute says it would be unwise to expect the tariff picture is going to just hold steady for 10 full years.
ADAM HERSH: It's not a source of revenue that the government can really rely on, particularly when the president is aiming to use it as a bargaining chip that could go away the moment that the president decides to cut a deal or just to walk back on his threats.
HORSLEY: And keep in mind, all this money the government's collecting in tariffs, it's not just falling out of the sky or coming from foreign countries. It's mostly being paid by American businesses and American families, and there will likely be some economic fallout from that.
KELLY: Well, stay with that point for a second. What kind of economic fallout?
HORSLEY: Well, the CBO projects these tariffs will lead to higher inflation and slower economic growth. I talked today with a wine importer in Columbus, Ohio, Patrick Allen. He would typically be ordering wine from France this time of year to sell during the fall and through the holidays, but he says a lot of those orders are on hold right now because he doesn't know if the tariff is going to be 10% or 20% or 50%.
PATRICK ALLEN: We're going to be out of stuff on the shelves. But the thing is, all of those out of stocks on the shelves represent the money that we would have been making that we won't be making. Importers are afraid. They don't know when the other shoe is going to drop.
HORSLEY: You can look at these tariffs as a $2.8 trillion tax on the economy that's been imposed entirely by the president.
KELLY: NPR's Scott Horsley, thanks, as ever, for your reporting.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
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