President Donald Trump speaks before he is signed on March 6, 2025 in the Oval Office in the Oval Office.
Alex Wong | Getty pictures
President Donald Trump says that tariffs will make the USA “rich”. But these wealth will probably be far less than the White House expected, said economists.
The final amount could have a major impact on the US economy, debts and the state's legislative negotiations via a tax-cut package, said economists.
Peter Navarro, the trade advisor of the White House, would increase estimated tariffs on Sunday around 600 billion US dollars a year and 6 trillion dollars over a decade. Autozölle would add another 100 billion US dollars a year, he said to “Fox News Sunday”.
Navarro made the projection because the United States is planning to announce further tariffs against US trading partners on Wednesday.
Economists expect the Trump government's collective bargaining policy to achieve much lower income than Navarro claims. Some project that the total turnover would be less than half.
Around 600 to 700 billion US dollars a year “are not even in the area of opportunities,” said Mark Zandi, chief economist at Moody's. “If you have 100 to 200 billion US dollars, you are pretty lucky.”
The White House refused to answer a comment from CNBC for tariff revenue.
The “mental mathematics” behind tariff income
There are big questions about the scope of tariffs, including details such as amount, duration, as well as from the affected products and countries, all of which have a significant impact on the income as a whole.
The White House is considering a tariff of 20% in most imports, reported Washington Post on Tuesday. President Trump hovered this idea on the campaign path. The Trump government can ultimately opt for another policy, like land to Landzölle, which are based on the respective trade and non-trade barriers of every nation.
However, a tariff rate of 20% seems to be aligned with Navarro's sales projections, according to the economists.
The United States imported around 3.3 trillion dollars in 2024. The application of a tariff rate of 20% for all of these imports would achieve annual sales of around 660 billion US dollars.
“This is almost certainly the mental mathematics Peter Navarro – and that mental mathematics skipped some important steps,” said Ernie Tedeschi, director of economics at the Yale Budget Lab and former chief economist of the White House Council of Economic Advisers during the Biden management.
Commercial advisor of US President Donald Trump Peter Navarro speaks on March 12, 2025 in Washington, DC, with press outside the White House.
Kayla Bartkowski | Getty pictures
This is because an exact income estimate has to explain the many economic effects of tariffs in the USA and all over the world, said economists. These effects combine to reduce the income, they said.
According to Tedeschi, a broad tariff of 20% would increase around 250 billion US dollars per year (or 2.5 trillion US dollars over a decade), with reference to a Yale budget laboratory analysis published on Monday.
There are opportunities to increase larger sums – but they would include higher tariff rates, said economists. For example, a comprehensive 50% tariff would increase around $ 780 billion a year, according to the Economics for International Economics.
This is also an optimistic assessment: due to retaliation measures or the negative growth effects of the tariffs themselves, they did not write a lower US economy growth.
Why income is lower than expected
Customs generally increase prices for consumers. According to Yale Budget -Labor, a wide tariff of 20% would cost the average consumer 3,400 to 4,200 US dollars per year.
Consumers would of course buy less imported goods if they cost more, economists said. Lower demand means less imports and fewer customs income from these imports, they said.
It is also expected that the tariff “reduced economic activity”, said Robert McClelland, Senior Fellow in the Urban-Brookings Tax Policy Center.
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For example, US companies that are not passed on to consumers to the tariff costs (and their income taxes decrease) would not be passed on to consumers), said economists. Consumers could withdraw the expenditure, the company profits and tax revenue further, said economists. Companies that take a financial goal could be released, they said.
It is also expected that foreign nations will reciprocate with their own tariffs for US products, which would violate companies that export products abroad. Other nations can experience an economic downturn and further reduce the demand for US products.
“If you receive a 20% collective bargaining course, you will receive a recession that will undermine your fiscal situation,” said Zandi.
There is probably also a certain degree of non -compliance with collective bargaining policy and the scope for certain countries, industries or products, says economists. For example, when the White House raised tariffs in China in February, it frees “de Minimis” imports worth $ 800 or less for an indefinite period.
The Trump government could also transfer some tariff income for paying certain parties by a trade war, said economists.
President Trump did this in his first term: the government sent “relief payments” to American farmers, who, according to the Council for Foreign Relations from 2018 to 2020, were almost all (92%) of the tariff income for Chinese goods from 2018 to 2020.
The tariffs will probably also have a short lifespan and have their potential income, according to the economists. They are exhibited by Executive Order and could be easily undone, be it by President Trump or a future president.
“There is no probability that these tariffs will take 10 years,” said Zandi. “If you last until next year, I would be very surprised.”
Why is that important
The Trump administration has signaled that tariffs “will be one of the first-class possibilities that will try to compensate for the costs” to adopt a package of tax cuts, said Tedeschi.
According to the Tax Foundation, the extension of a law on tax cut from 2017 by President Trump from President Trump would cost 4.5 trillion dollars over a decade. Trump has also called for other tax reliefs, such as no taxes on tips, services for overtime or social security services as well as a tax deduction for car loan interest for American cars.
If the tariffs do not cover the full costs of such a package, the Republican legislators would have to find cuts elsewhere or increase the nation's debt, economists said.