Trump’s Tariff Collections Reach Historic High, Hit $150 Billion in July: What Can US Prez Do with the Revenue?

Tariff collections in US President Donald Trump’s second term have hit a historic high, reaching $150 billion by July 29, 2025. According to the White House, the surge has brought the first June budget surplus in nearly 10 years, and July alone saw nearly $28 billion in customs duties — the biggest monthly haul of this year till now.

This revenue jump comes just after sweeping tariffs that were levied on countries in April. The Trump administration had imposed a 10 per cent levy on nearly all imported goods, along with additional hikes depending on the US' trade deficit with nations.

According to a Business Standard report, in the first four months of the US administration, these measures brought in around $100 billion. This is more than triple the amount collected in the same period last year.

As per projections made by treasury officials now, tariffs could generate over $300 billion for the federal government annually. Commerce Secretary Howard Lutnick told Fox Business that monthly collections could reach to $50 billion.

How do Tariffs Function?

A tariff mainly refers to a tax that’s charged on imported goods, which is paid by the companies bringing products into the United States. This amount is generally collected by US Customs and Border Protection at entry ports and transferred to the Treasury Department’s general fund, where Congress takes the decision on its spending.

Despite being intended as a tool to protect domestic industry and raise government revenue, tariffs often lead to higher prices for consumers. This is because importers pass on some of the costs.

What Can Trump Do with Tariff Revenue?

Trump has given several uses for the growing tariff revenue, which include paying down part of the $1.3 trillion federal deficit that the government’s running for the current fiscal year as well as issuing 'tariff rebate checks' to Americans. However, the second one would require congressional approval.

According to a report by The New York Times, Republicans seem to hope that the tariffs can help offset the estimated $3.4 trillion that could be added to the debt over the next decade following the passing of Trump's 'One Big Beautiful Bill Act'.

Experts say that over time, the tariffs if left in place can be worth $2 trillion in additional revenue over the next decade.

2025 Tariffs Highest Since Great Depression

During the Great Depression, the US last imposed tariffs of this scale under the Smoot-Hawley Tariff Act of 1930. The move back then triggered international retaliation and reduced global trade. As per economists cited by USA Today, it was warned that while tariffs can deliver large sums to government coffers, they can also slow economic growth, disrupt supply chains as well as strain industries dependent on imports.

Risks that Follow

With higher import taxes being imposed, US manufacturers can be hit by raising the cost of raw materials, while also prompting trading partners to retaliate.

To understand this better one can take an example from Trump’s first presidential term. This was when tariffs on $370 billion of Chinese goods led to counter-tariffs on key US farm exports, thereby costing American farmers $27 billion in lost sales over 2018-19. However, the government later responded with $28 billion in relief payments to agriculture.

As per a 2024 report by USA Today, the US agricultural sector has still not fully recovered from this.

Currently, tensions are not only prevalent between the US and China, but several nations, as trade agreements have not yet been finalized with major trade partners.

According to research from the Peterson Institute for International Economics (PIIE), even though tariffs could theoretically raise trillions over a decade, the gains would be sharply reduced once economic slowdowns and foreign retaliation are taken into account.

Apart from that, even tariff revenue remains far from enough to offset the US debt entirely. The country's total federal debt has risen above $36 trillion, thereby prompting warnings from economists that rising interest payments are crowding out public investments in infrastructure and other growth-focused programmes, a report by CNN stated.