Tariffs introduced by President Donald Trump are expected to substantially boost federal tax revenues, even as they weigh on overall U.S. economic growth.
A report by the Tax Foundation, published last Friday, estimates tariffs will generate $2 trillion in revenue from 2026 to 2035 on a conventional basis and $1.6 trillion on a dynamic basis after accounting for economic impacts.
Conventionally, Section 232 tariffs are projected to raise $635 billion, and International Emergency Economic Powers Act (IEEPA) tariffs $1.4 trillion over the decade, with lower collections in 2025 because they were not in place for the full year.
On a dynamic basis, revenues fall to $490 billion for Section 232 and $1.1 trillion for IEEPA tariffs due to negative economic effects. Retaliatory tariffs further reduce projected 10-year revenue by $136 billion.
In 2026, Trump’s tariffs are projected to raise federal tax revenues by $171.1 billion, equivalent to 0.54% of GDP, marking the largest tax increase since 1993. If the IEEPA tariffs are permanently blocked, however, the remaining measures would generate $53.8 billion in revenue, or about 0.17% of GDP, that year.
The report also highlighted that On average, U.S. households will face a $1,000 tax increase in 2025 and $1,300 in 2026 due to tariffs. If the IEEPA tariffs are permanently blocked, the 2026 increase would drop to about $400.
Revenue Surges, November Shows Decline
According to the foundation, in 2025, customs duties generated $264 billion in federal revenue, including both newly imposed and existing tariffs. However, after accounting for the reduction in income and payroll tax bases, the government’s net gain from the new tariffs is estimated at $132 billion.
As per Customs and Border Protection data, between January 20 and December 15, 2025, the U.S. collected over $200 billion in tariff revenue. However, in November, tariff revenue saw a month-over-month decline for the first time since its imposition in April, as per Treasury Department data, raising concerns.
Tariffs, Investment & Legal Scrutiny
Trump has previously asserted that his tariff policies have sparked an unparalleled wave of new investment into the U.S. economy, as companies opt to build domestically to evade the high duties on imports. “Because of the tariffs, we’ve taken in more than $18 trillion,” he said.
The president described his tariff strategy as essential to national security and imposed many of the measures under the IEEPA. Tariffs particularly imposed under this act are currently under review by the Supreme Court, with Wall Street closely monitoring the outcome.
Meanwhile, Supreme Court Justice Ketanji Brown Jackson recently expressed skepticism over the possibility of courts compelling Trump to refund his recently imposed tariffs, citing the constitutional complexity and numerous nuanced legal issues involved.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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