President Donald Trump holds a signed executive order on tariffs. (REUTERS/Leah Millis)
President Donald Trump’s Senior Adviser, Peter Navarro, once suggested that the Trump tariffs would generate $700 billion per year.
Not so, says one researcher.
Writing in Reason, Research Fellow Jack Salmon from the Mercatus Center takes issue with Navarro’s apparently inflated numbers.
“At the time (of their announcement), I estimated that a more realistic estimate of the maximum additional revenue these tariffs could reap was likely less than $300 billion, which would barely fund two weeks of federal government spending,” Salmon writes.
Citing customs duties revenue data as evidence, Salmon suggests his prediction has been borne out, “far closer to reality than what the administration was promising.”
Tariff revenues did tick up during this 11-month period, Salmon notes, averaging just under $27 billion a month from April 2025 through February 2026. That’s “roughly $296 billion in cumulative tariff revenues since” the tariffs were announced, Trump’s so-called “Liberation Day.”
Salmon uses that monthly average to predict March’s total will bring the year’s revenue to about $323 billion.
There is a catch even to that lower number than the administration’s predictions. It’s not all “Liberation Day” forward. “In the year leading up to April 2025, the treasury already collected about $83 billion in customs duties.”
That means, by Salmon’s estimate, Trump's tariffs led to about $240 billion in additional revenue within 12 months. To put it another way, that’s “enough revenue to fund an additional 12 days of federal government spending,” Salmon says.
“If we were to use a slightly more generous measure of monthly tariff revenue by annualizing only the monthly collections when the effective tariff rate was 10 percent or more, then we get about $264 billion, or enough to fund about 13 additional days of government spending.”
Adding to the downside, Salmon cites the negative economic impact of tariffs and broader trade uncertainty. “That means that economic output was lower over the last year than it would have been absent tariffs. The Yale Budget Lab estimated that this dynamic effect reduces tariff revenues by at least $41 billion this year.”
Adjusted for those effects, additional tariff revenue covers only 10 or 11 days of government spending, rather than 12 or 13, Salmon contends. That of course, is subject to whether refunds are going to be made.
“The past year provides a useful reality check on claims that tariffs can meaningfully improve the federal government's fiscal position,” Salmon said.
He concludes that the lesson here is straightforward: “Tariffs cannot solve the federal government's fiscal imbalance. If policymakers are serious about addressing the deficit, they will have to look beyond protectionist taxes and confront what's really driving our deficits, namely out of control growth in entitlement spending.”