Whether or not tariffs imposed by Trump end up hurting more than helping America remains to be seen, but it's clear that they're fulfilling at least one part of his promise: they generate new revenue for the budget.
After doubling in April – which was a tumultuous month that saw a drop in trade with China and a general slowdown due to front-loading of imports by American companies in March – May has continued its strong pace, bringing in even more money.
From just $8 billion in March, to ca. $16 billion in April and now over $22 billion in May – that's nearly three times what the US collected at the border before Trump started his global trade war.
The $8.2 billion figure for March was inflated a little bit by the unusually high activity, so the baseline figure was closer to $7 billion that the Treasury reported monthly throughout 2024.
Maybe even closer to $6.5 billion, considering that for the entire fiscal 2024 (ending September 30) the US collected just $77 billion in customs duties – a figure surpassed in 2025 already, with the tally standing at $81 billion with four months left.
Even if the tariff revenues flatlined the country would collect more than double what it did last year, at over $160 billion.
At this rate a full year tariff revenue would amount to over $260 billion – or more than half of what corporate taxes bring in.
Yes, over 50% of what all companies in America pay on their annual profits, just from taxing trade a bit more.
In reality, however, it is bound to be more than that.
With disruptions to trade with China and only just announced 'truce' between the two superpowers, we might see a bounce-back in bilateral exchange, that the US is going to collect its cut from.
Meanwhile, the White House is yet to conclude trade deals with the rest of the world, while only collecting the baseline 10% tariff, while the elevated, "reciprocal" levels announced in April remain suspended.
While nobody is expecting them to be reinstated, the rates will be above the base 10% for most of the world, resulting in higher revenues to the US budget.
That's why the $22 billion reported in May is not likely to be the final level and we may expect a jump to $30 or maybe even $40 billion in the future – which would mean that tariff revenue would match what the entire corporate America pays into the coffers in DC.
No time for champagne yet
However, a word of caution is needed here, as we do not quite yet know the full extent of the impact tariffs will have on trade and, as a result, domestic economic activity and profits of American companies.
A decrease in business could begin cannibalising other revenues – coming both from both corporate and personal income taxation.
If tariffs hurt profits then, naturally, companies are going to pay less in taxes. Similarly, with weaker results the richest Americans may report lower incomes. Top 5% of taxpayers contribute to a whopping 60% of PIT revenues, so any positive impact of tariffs could be greatly undone if they bite the Treasury at some other place.
Nevertheless, as things stand, it does seem that Trump was right and pursuing a more protectionist trade policy could help ease fiscal woes without unduly hurting the economy.
To be sure of that, however, we need to wait for at least a year.
