The controversial tariffs imposed by President Donald Trump have turned into a major revenue stream for the U.S. government, amassing approximately $350 billion at an annualized pace.
Tariffs Now A Major Federal Revenue Source, Says Economist
The tariffs, which are essentially taxes on imported goods, have become a “significant” source of federal revenue, according to Torsten Slok, chief economist at Apollo Global Management, reported Fortune. This sum represents approximately 18% of annual household income tax payments, highlighting the significant effect of tariffs on the U.S. economy and trade policy.
As per Slok, although tariffs have long been a contentious aspect of U.S. economic policy, they have resurfaced in recent years as a central component of the nation’s trade strategy. The current annualized collection, totaling $350 billion, ranks among the largest in recent history.
“The bottom line is that the amount of money collected in tariff revenue is very significant,” stated the economist.
Notably, President Trump has been hesitant to raise taxes elsewhere, making the tariff revenue even more significant. The Committee for a Responsible Federal Budget (CRFB) has also acknowledged the tariffs’ importance as a federal revenue source, suggesting that they could help manage the country’s $37 trillion national debt.
The Congressional Budget Office (CBO) estimates that the tariffs could lower the deficit by as much as $4 trillion over the next ten years. However, most economists argue that even with the unprecedented tariff revenue, the funds would mainly curb debt growth rather than eliminate it.
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Tariffs, A Boost To US Financial Stability, Says Expert
The tariffs, initially a cause of concern for financial markets, have emerged as a crucial element of Washington’s financial stability, shielding the U.S. from the worst of the recent global bond market turmoil. This shift in perspective has helped the U.S. avoid the worst of the recent government bond market sell-off, reported The Washington Post.
In the past, Wharton professor Joao Gomes said Trump tariffs are likely to persist, as both parties may support them for revenue generation. While their scope and impact remain uncertain, he noted that tariffs are “definitely not a thing of the past.”
Fed Dilemma Amid Tariffs And Economic Slowdown
However, the tariffs have also created a policy dilemma for Federal Reserve Chair Jerome Powell, with economist Justin Wolfers suggesting that they have caused a slowdown in economic activity and rising unemployment, leaving the Fed with conflicting policy signals.
Despite the financial boon of the tariffs, not all countries are benefiting. China, for instance, is walking away from the U.S. market, with data from the Treasury Department showing that foreign investors purchased a net $2 billion of U.S. securities in July 2025, marking the third consecutive month of net inflows.
At the same time, in a private session at the 155th Yale Chief Executive Leadership Institute’s CEO forum, more than 100 leading business figures, including Fortune 500 CEOs, collectively raised concerns over the economic effects of President Donald Trump’s policies, highlighting both the potential short-term benefits and long-term risks.
Price Action: Amid Trump tariffs, SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust, Series 1 QQQ climbed 14.06% and 18.03%, respectively on a year-to-date basis, as per Benzinga Pro.
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