According to the U.S. Treasury, President Donald Trump’s tariffs have brought in around $100 billion to date in 2024, with the possibility of reaching $300 billion by year-end. However, there are concerns that these measures could eventually lead to higher costs for American consumers unless importers or domestic businesses shoulder the burden themselves.
Data from the U.S. Bureau of Labor Statistics shows that producer prices remained stable in June, indicating that the U.S. has so far managed to avoid major economic disruptions from the tariff policy. Analysts from Morgan Stanley estimate that over the next decade, tariffs could generate up to $2.7 trillion in revenue. They also suggest that while the deficit might shrink by $2.8 trillion, economic expansion could be dampened as a result.
The Congressional Budget Office (CBO) has expressed concerns, stating that changes in tariff policies could shrink the U.S. economy, partly due to retaliatory measures taken by other nations in response to U.S. tariff hikes.
Federal Reserve Chair Jerome Powell has pointed to potential inflationary pressures from tariffs as one reason for maintaining current interest rates, even though producer-price inflation dropped to 2.3% year-over-year in June. Experts note that any consumer price increases tied to tariffs might not appear immediately.
Morgan Stanley has also warned that investors may not be fully accounting for the long-term risks associated with these trade policies. The CBO projects that U.S. GDP could be 0.6% smaller in a decade due to the cumulative effects of tariffs.
In summary, while tariffs could help reduce the deficit by $2.8 trillion over the next ten years, economists caution that they essentially act as an import tax that may eventually influence consumer prices. The CBO expects a modest slowdown in economic growth, and despite current price stability, the Federal Reserve remains watchful of potential inflationary trends linked to trade policies.
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Fact Check Team: Trump tariffs generate $100 billion, but economic impact up for debate
President Donald Trump ‘s tariffs have generated approximately $100 billion so far this year, according to the U.S. Treasury, , and have the potential to collect $300 billion by the end of the year.
have warned that the cost of these tariffs may ultimately be passed on to American consumers, unless importers or businesses absorb the costs themselves.
Did prices rise in June?
The report indicated that producer prices did not rise, according to the U.S. Bureau of Labor Statistics, suggesting that the U.S. has so far avoided significant economic fallout from the tariffs. Morgan Stanley analysts project that tariffs could bring in $2.7 trillion over the next decade, according to , while the they could reduce the deficit by $2.8 trillion but also slow economic growth.
In CBO’s assessment, the changes in tariffs will reduce the size of the U.S. economy – in part because of tariffs imposed by other countries in response to the increases in U.S. tariffs,” said the CBO.
Will prices eventually rise? Powell seems to think so
Federal Reserve Chair as a reason for not cutting interest rates, despite a decline in producer-price inflation to 2.3% year over year in June. The potential impact of tariffs on consumer prices could be delayed.
that the U.S. GDP will be 0.6% smaller in ten years due to tariffs. Morgan Stanley has cautioned that investors may be underestimating the long-term risks associated with tariffs.
The bottom line
While tariffs might reduce the deficit by $2.8 trillion over the next decade, financial experts describe them as a tax on imports that could affect consumers ‘ prices. The CBO anticipates slightly weaker economic growth over time, and although prices are currently down, the Federal Reserve remains cautious about potential inflationary effects from tariffs.