\n<\/p>\n
President Donald Trump has said over the last year that money brought in from his increased tariffs would pay for at least half a dozen initiatives \u2014 from reducing the national debt to providing dividend checks to \u201cmoderate income patriots\u201d \u2014 but the revenue raised so far can\u2019t deliver all of them.<\/p>\n
In fact, that revenue would be able to cover only a fraction of what the president has proposed. Trump recently<\/a> highlighted<\/a> three initiatives that he claimed would be \u201ceasily\u201d paid for because of the tariff revenue: an increase in the defense budget, dividend checks for Americans and paying down the debt. It would take several years for the estimated revenue from Trump\u2019s tariffs to cover the cost of those first two proposals, if the tariff rates remain in effect.<\/p>\n \u201cTariffs fall very short of funding all the priorities the President has suggested they can pay for,\u201d Erica York<\/a>, vice president of federal tax policy at the Tax Foundation, told us.<\/p>\n \u201cWhile tariffs are tax increases that raise more revenue for the federal government, the revenue coming in is not enough to cover all the spending the President envisions,\u201d she said.<\/p>\n During Trump\u2019s first year in office, from January through December, the U.S. collected $264 billion from tariffs, according to the Treasury Department\u2019s monthly statements<\/a>. That is more than three times what tariffs brought in during the previous 12-month period, which was about $79 billion.<\/p>\n But many of the president\u2019s new tariffs didn\u2019t go into effect<\/a> until the second half of the year, and the $264 billion includes already existing<\/a> tariffs that the U.S. had regularly been collecting.<\/p>\n Projections from the Congressional Budget Office<\/a> and the Tax Policy Center<\/a> estimate that revenues from Trump\u2019s new tariffs would average about $230 billion annually over the next decade, with somewhat higher returns in the near future and lower returns in later years as consumers shift away from buying imports.<\/p>\n But just the three policy priorities that Trump recently outlined would total at least $1 trillion, conservatively.<\/p>\n In a Jan. 7 post<\/a> on Truth Social, Trump proposed a 50% increase to the military budget, bringing it to a total of $1.5 trillion, and said that the tariffs could \u201ceasily\u201d pay for that while, at the same time, paying down the national debt and paying for \u201ca substantial Dividend to moderate income Patriots within our Country!\u201d<\/p>\n A breakdown of cost estimates for those three initiatives shows:<\/p>\n Military budget \u2014 As described by Trump, an increase from $1 trillion to $1.5 trillion would cost $500 billion.<\/p>\n National debt \u2014 The president hasn\u2019t specified how much he would pay down the debt, but the current total debt<\/a> is more than $38 trillion and rising quickly<\/a>.<\/p>\n Dividend checks \u2014 Trump hasn\u2019t presented details on the checks, and when we asked the White House for information, we didn\u2019t get a response. But he previously said<\/a> they would be $2,000 checks to be \u201cpaid to everyone\u201d except \u201chigh income people.\u201d Based on that, an analysis<\/a> from Yale University estimated the total cost would be $450 billion, if the income limit were $100,000.<\/p>\n So, the total amount collected from tariffs in 2025 would cover only about half of the cost of either the military spending increase or the dividend checks, and it would cover less than 1% of the national debt.<\/p>\n Those three initiatives aren\u2019t the only ones the president has said would be funded by tariff revenue, either. He has also said tariffs would cover military bonus payments and aid to farmers and might even raise enough revenue to one day eliminate income taxes.<\/p>\n We asked the White House for an explanation of how tariff revenue would cover the cost of all these proposals, but we didn\u2019t receive a response.<\/p>\n Further complicating Trump\u2019s claims<\/a> that tariffs will pay for government programs and make the U.S. \u201cso rich, you\u2019re not going to know where to spend all that money,\u201d is that he\u2019s described conflicting goals. He has said both that tariffs are meant to \u201cbring in tremendous amounts of money<\/a>\u201d \u2014 a goal that depends on a high volume of imports \u2014 and also that they are meant to encourage growth in U.S. manufacturing, reducing imported goods and, therefore, the taxes collected on them.<\/p>\n The president has used two primary<\/a> avenues for imposing his increased tariffs \u2014 section 232 of the Trade Expansion Act and the International Emergency Economic Powers Act, or IEEPA, which has never<\/a> before<\/a> been used to implement tariffs like this, according to legal experts.<\/p>\n So far, in the fiscal year that started in October \u2014 which also captures the time period during which most of the new tariffs were in effect<\/a> \u2014 collections from the IEEPA tariffs have made up 67% of the total tariff revenue collected, according to data<\/a> from U.S. Customs and Border Protection.<\/p>\n The question as to whether or not Trump can use the IEEPA to impose tariffs is before the U.S. Supreme Court, which is expected to rule soon<\/a>.<\/p>\n During oral arguments<\/a> for that case, the lawyer for the administration, Solicitor General D. John Sauer, argued that the tariffs under the IEEPA are legitimate because they are a negotiating tool rather than a means of raising tax revenue. \u201cThese are regulatory tariffs. They are not revenue-raising tariffs,\u201d he said. \u201cThe fact that they raise revenue is only incidental. The tariffs would be most effective, so to speak, if no person ever paid them.\u201d<\/p>\n Using the example of the national emergency<\/a> regarding<\/a> the trade deficit<\/a> that Trump declared on April 2, Sauer explained further, \u201cIf you look at the trade deficit emergency, if nobody ever pays the tariffs and instead Americans direct their consumption towards American producers and stimulate the rebuilding of our hollowed-out manufacturing base, then the policy is by far the most effective.\u201d<\/p>\n York pointed to this argument in saying, \u201cThe President has made many contradictory statements about his rationale for imposing tariffs. For tariffs to continue generating revenue, we need to continue importing goods into the United States. But if, as the administration argued before the Supreme Court, revenue is not the rationale and ideally the tariffs would generate no revenue, then the President should not plan to fund his expenditure plans with tariffs.\u201d<\/p>\n Here\u2019s a breakdown of six initiatives Trump has said tariff revenues would fund.<\/p>\n Trump has repeatedly<\/a> said<\/a> that tariff revenue could potentially replace the federal income tax.<\/p>\n He said<\/a> in the spring, \u201cAnd it\u2019s possible we\u2019ll do a complete tax cut. Because I think the tariffs will be enough to cut all of the income tax.\u201d<\/p>\n And he repeated<\/a> the idea in the fall, saying, \u201cAnd over the next couple of years, I think we\u2019ll substantially be cutting \u2014 and maybe cutting out completely \u2014 but we\u2019ll be cutting income tax, could be almost completely cutting it because the money we\u2019re taking in is going to be so large,\u201d referring to tariffs and trade deals.<\/p>\n As we\u2019ve written before<\/a>, there is a yawning gap between the revenues raised from personal income taxes versus those raised from tariffs. In fiscal year 2024, tariffs on imports<\/a> accounted for less than 2% of the more than $4.9 trillion in\u00a0federal receipts<\/a>.<\/p>\n Using the most recent monthly Treasury report, the U.S. brought in a total of $484 billion during the month of December. Half of that \u2014 $242 billion \u2014 came from individual income taxes. Tariffs, however, made up about 6% of the total revenues \u2014 $28 billion.<\/p>\n \u201cIt is literally impossible for tariffs to fully replace income taxes,\u201d Kimberly Clausing<\/a>\u00a0and\u00a0Maurice Obstfeld,<\/a>\u00a0economists with the Peterson Institute for International Economics, wrote<\/a> last year. \u201cTariff rates would have to be implausibly high on such a small base of imports to replace the income tax, and as tax rates rose, the base itself would shrink as imports fall, making Trump\u2019s $2 trillion goal unattainable.\u201d<\/p>\n The president<\/a> frequently<\/a> says<\/a> that he will use tariff revenues to pay down the national debt, as he did in November, saying<\/a>, \u201cWe\u2019re going to be lowering our debt, which is a national security thing.\u201d<\/p>\n The total national debt<\/a>, including money the federal government owes to itself, is $38 trillion, as of this month.<\/p>\n As we said, the total amount brought in by tariffs in 2025 was $264 billion, which is less than 1% of the national debt.<\/p>\n Trump hasn\u2019t said how much of the tariff revenue he would use to try to pay down the debt, but it\u2019s worth noting that some of his policies are projected to further increase yearly deficits \u2014 and ultimately, the total debt. For example, the One Big Beautiful Bill Act<\/a>, which extended<\/a> parts of the Tax Cuts and Jobs Act from his first term and introduced other new tax cuts, is projected<\/a> by the nonpartisan Congressional Budget Office to increase budget deficits by $3.4 trillion from 2025 to 2034.<\/p>\n For comparison, the CBO has estimated<\/a> that new tariff rates enacted from Jan. 6 to Nov. 15, 2025, will bring in about $2.5 trillion over 11 years, if those tariffs remain the same. The deficit reduction would be $3 trillion, including the impact on debt interest. So, the total tariff revenues aren\u2019t even expected to cover the cost of a policy Trump has already enacted.<\/p>\n The budget<\/a> for the Department of Defense in fiscal year 2026 is about $900 billion<\/a>.<\/p>\n In his Jan. 7 Truth Social post<\/a>, Trump proposed raising that total budget by about 50%.<\/p>\n \u201cI have determined that, for the Good of our Country, especially in these very troubled and dangerous times, our Military Budget for the year 2027 should not be $1 Trillion Dollars, but rather $1.5 Trillion Dollars,\u201d he wrote.<\/p>\n \u201c[B]ecause of Tariffs, and the tremendous Income that they bring \u2026 we are able to easily hit the $1.5 Trillion Dollar number,\u201d Trump said.<\/p>\n The Committee for a Responsible Federal Budget has estimated<\/a> that this proposed increase would total $5 trillion through 2035 and add\u00a0$5.8 trillion\u00a0to the national debt, including interest.<\/p>\n \u201cIn reality, the military spending increase would be about twice as large as expected tariff revenue,\u201d the CRFB said.<\/p>\n \u201cWe\u2019ve taken in hundreds of billions of dollars in tariffs. We gave the military, the entire military \u2026 $1,776 dollars, that\u2019s not bad,\u201d Trump said<\/a> on Dec. 31, referring to so-called \u201cwarrior dividend<\/a>\u201d bonus checks sent to military personnel in December.<\/p>\n When he announced<\/a> the program on Dec. 17, the president said the bonuses\u00a0were made possible by revenue from tariffs and the One Big Beautiful Bill Act.<\/p>\n They\u00a0were\u00a0actually\u00a0entirely\u00a0funded<\/a>\u00a0by a\u00a0$2.9\u00a0billion<\/a> appropriation in the One Big Beautiful Bill Act, which passed in July \u2013 \u00a0a reallocation of funds initially earmarked for an increased housing allowance.<\/p>\n The $1,776 checks were sent to about 1.5 million active-duty and reserve military members, according to a post<\/a> from the U.S. Army. That would put the total cost at about $2.6 billion.<\/p>\n The president has also promised tariff-revenue dividend checks to most Americans.<\/p>\n On Nov. 9, Trump posted<\/a> on Truth Social, \u201cA dividend of at least $2000 a person (not including high income people!) will be paid to everyone.\u201d<\/p>\n He reiterated that pledge in his Jan. 7 post<\/a>, but hasn\u2019t offered any further details.<\/p>\n A Yale University analysis estimated<\/a> that, based on the expectation that the program would provide $2,000 checks for those making under $100,000, it would cost $450 billion.<\/p>\n For reference, the last round of COVID-19 economic stimulus checks \u2014 which provided<\/a> $1,400 to those making less than $75,000 and $1,400 per dependent \u2014 went to about 176 million people and cost<\/a> just under $410 billion, according to the Government Accountability Office.<\/p>\n After China slashed<\/a> its purchase of American soybeans in 2025 following Trump\u2019s imposition of additional tariffs, the administration announced<\/a> a $12 billion aid payment for farmers.<\/p>\n \u201cThe Soybean Farmers of our Country are being hurt because China is, for \u2018negotiating\u2019 reasons only, not buying. We\u2019ve made so much money on Tariffs, that we are going to take a small portion of that money, and help our Farmers,\u201d Trump posted<\/a> on Truth Social on Oct. 1.<\/p>\n During the official announcement on Dec. 8, he repeated the claim that the bailout would be funded by tariffs, saying<\/a>, \u201cbecause of the tariffs, this is possible.\u201d<\/p>\n But the bailout<\/a> is being paid for by the Commodity Credit Corporation<\/a>, which provides<\/a> funding for agricultural programs and gets regular appropriations<\/a> from Congress, according to a press release<\/a> from the U.S. Department of Agriculture.<\/p>\n Editor\u2019s note:\u00a0FactCheck.org does not accept advertising. We rely on grants and individual donations from people like you. Please consider a donation. Credit card donations may be made through\u00a0our \u201cDonate\u201d page<\/a>. If you prefer to give by check, send to: FactCheck.org, Annenberg Public Policy Center, P.O. Box 58100, Philadelphia, PA 19102.\u00a0<\/em><\/p><\/div>\n President Donald Trump has said over the last year that money brought in from his increased tariffs would pay for at least half a dozen initiatives \u2014 from reducing the national debt to providing dividend checks to \u201cmoderate income patriots\u201d \u2014 but the revenue raised so far can\u2019t deliver all of them. In fact, that … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":17802,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-17801","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.jubi24.com\/wp-content\/uploads\/2026\/01\/Trumps-Tariffs-Dont-Come-Close-to-Funding-Everything-Hes-Proposed.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.jubi24.com\/index.php?rest_route=\/wp\/v2\/posts\/17801","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.jubi24.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.jubi24.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.jubi24.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.jubi24.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17801"}],"version-history":[{"count":1,"href":"https:\/\/www.jubi24.com\/index.php?rest_route=\/wp\/v2\/posts\/17801\/revisions"}],"predecessor-version":[{"id":17803,"href":"https:\/\/www.jubi24.com\/index.php?rest_route=\/wp\/v2\/posts\/17801\/revisions\/17803"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.jubi24.com\/index.php?rest_route=\/wp\/v2\/media\/17802"}],"wp:attachment":[{"href":"https:\/\/www.jubi24.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17801"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.jubi24.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17801"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.jubi24.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17801"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Replacing the Federal Income Tax<\/h2>\n
Reducing or Eliminating the National Debt<\/h2>\n
Increasing the Military Budget<\/h2>\n
\u2018Warrior Dividends\u2019<\/h2>\n
Dividend Checks<\/h2>\n
Farmer Bailout<\/h2>\n
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Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"