President Donald Trump’s new tariffs have generated billions of dollars since being implemented earlier this year.
If they remain in place, they could bring in $2.4 trillion over the next decade, according to the Budget Lab at Yale.
“Money that we raise from tariffs goes in what’s called the general fund, which is just kind of a catch-all fund that Treasury runs,” said Ernie Tedeschi, director of economics at the Budget Lab at Yale.
Tedeschi noted it is up to Congress to decide how to use that money.
Republican Sen. Josh Hawley has introduced legislation that would use some of the revenue to send rebate checks to Americans.
Meanwhile, Trump has said the tariffs will help the U.S. eliminate its debt.
“Tariffs are making our country very rich again, and we’ll be able to take care of our debt,” Trump said.
But with the national debt at more than $37 trillion, tariff revenue alone is just a drop in the bucket.
“When you have a $2 trillion deficit every year, every little bit counts, I suppose,” said Christopher Hodge, chief U.S. economist at Natixis CIB.
He added, “If you’re going to actually make a dent, you have to touch the largest pieces of the pie, which are interest, entitlements, and defense.”
Hodge, who previously worked at the Treasury Department, noted tariff revenue could decline if Trump’s other goal from tariffs comes to fruition: more U.S. companies reshoring their manufacturing.
“You can’t have tariffs solve all of your policy problems,” he said. “They can’t raise additional revenue and also be protectionist. Those things are, by definition, in conflict.”
Tariffs’ long-term impact could also depend on who is in the White House next.
“If the next president is not similarly inclined to keep these tariffs, we’re not looking at a trillion in additional funds, we’re looking at something significantly less,” he said.
If a Democrat won the White House, it would not necessarily mean all of Trump’s tariffs would go away.
Hodge pointed out that former President Joe Biden kept some of the tariffs imposed during Trump’s first term.
The potential future revenue from tariffs could also be affected by the Supreme Court.
Justices are set to hear a case in November on the legality of many of the Trump administration’s tariffs.
Until then, the tariffs will remain in place.
