President Trump said his goal of imposing tariffs was to force businesses to return production to the United States. If the manufacturer makes a product in the United States, he insists that he does not have to pay customs duties.
However, the latest revenue forecasts presented by his administration question what Trump wants to achieve with the tariffs he places on both his allies and his enemies.
Trump's senior trade adviser, Peter Navarro, told Fox News on Sunday that the massive tariffs the president is imposing would raise about $6 trillion over the next decade.
He argued that Americans would not bear the costs, but these estimates imply that tariff burdens could fall heavily on consumers, rather than encouraging businesses to reissue their supply chains on the re-shore.
Trade experts argue that using tariffs to generate revenue is inconsistent with the goal of using tariffs to bring factories back to the US. For the government to earn so much income, Americans need to continue to buy a substantial amount of imported products.
Navarro said the administration would also cut costs for Americans by lowering gas prices. Trump officials say it will be achieved by drilling more oil in the US.
“Taxes are tax cuts, tariffs are employment, tariffs are national security,” Navarro said. “Taxes are best for America.”
Trump is expected to introduce global tariffs on other countries this week. We also spoke repeatedly about replacing taxes with customs duties. However, the US government has raised about $2 trillion from personal and corporate income taxes. In 2024, the US imported $4 trillion in products. This means that tariffs must be very high to replace tax revenues.
Economists' calculations from Peterson Institute for International Economics suggest that tariff revenues can peak at around $780 billion a year. The revenue will then be reduced. This is because once tariffs reach a certain level, consumers tend to stop purchasing imported products. This means that the revenue generated will decrease.
Yale Budget Lab estimated that automobile fares, scheduled to go into effect Thursday, could raise between $600 billion and $650 billion between 2026 and 2035. However, these prices drop significantly to consumers. U.S. vehicle prices are up 13.5% on average, equivalent to an additional $6,400 at the average price of 2024 cars. As a result of the tariffs, the group estimated that all American households would pay an additional $500 to $600.
Trump campaigned during the Biden administration on reducing the inflation that plagued the US and other countries.
Navarro said tariffs led to price stability and prosperity in Trump's first term. “Trust in Trump,” he said.
