Trump promotes tariffs as a budget solution. But the harsh reality is ‘they’re very weak’ and barely make a dent in the $39 trillion national debt

For President Donald Trump, tariffs—beyond just the concept and the emotional reaction they spark—stand as “the most beautiful word” in the English language. He views their appeal in their purported ability to solve the nation’s biggest fiscal problems, acting as both an alternative to income tax and a fix for the country’s massive federal deficit. Yet this supposed cure may be more fantasy than reality, as experts argue tariffs are a flawed revenue-generating tool.

“As a revenue tool, they’re very weak,” Kyle Pomerleau, an international tax policy expert and senior fellow at the American Enterprise Institute, told . “They do bring in some money, but not nearly enough to make a significant difference either way.”

Trump has promoted tariffs as a viable way to tackle the national debt. But with the debt on track to hit a record $39 trillion, the revenue from current tariffs barely scratches the surface. Treasury Secretary Scott Bessent said the Trump Administration ultimately aims to fully replace all revenue lost from the International Emergency Economic Powers Act (IEEPA) tariffs—those struck down by the Supreme Court last month. However, both the new 10% tariffs introduced under Section 122 (which allows the president to impose short-term tariffs) and the previous IEEPA levies fail to make a meaningful dent in the federal deficit.

President Trump claimed last year that tariffs “are helping to slash the deficit this year by more than 25%.” But since his tariff strategy didn’t address the deficit then and is even more constrained now, that’s far from the truth.

Tariffs are a weak tool for addressing budget shortfalls

A report from the Committee for a Responsible Federal Budget (CRFB) found that the Supreme Court’s ruling on tariffs enacted under IEEPA will reduce federal revenue by $1.7 trillion through fiscal year 2036—assuming the government refunds the tariffs (a step the Supreme Court ordered). But even then, they never would have come remotely close to filling the large gap in the country’s rapidly growing and record-breaking federal deficit.

“There’s no real basis to the idea that tariffs will have a significant or meaningful effect on the budget outlook,” Pomerleau said.

Pomerleau calculates that the IEEPA tariffs would only have a minor impact, cutting the primary deficit by half a percentage point of GDP—a figure the Congressional Budget Office projects to be around 2.6% of GDP this year. He added that the new tariffs in place will definitely have an even smaller effect than that modest half a percentage point.

The nonpartisan fiscal watchdog crunched the numbers and found that even with the newly implemented 10% Section 122 tariffs, the national debt is set to rise to 125% of GDP by 2036—compared to the 120% estimate if the IEEPA tariffs had remained. The deficit will climb to 7.1% of GDP with the 10% tariff, versus 6.7% if the IEEPA levies were still in place.

The report forecasts that the current 10% tariff will raise just $925 billion in revenue over the next decade. A 15% tariff—which Bessent said the Trump Administration plans to roll out this week—would bring in $1.3 trillion by 2036, still $400 billion less than the estimated revenue from the IEEPA tariffs. However, the 10% Section 122 tariffs are temporary, expected to raise only about $35 billion over the next five months—compared to the $65 billion the IEEPA tariffs would have generated in the same period.

What’s the solution?

Pomerleau points out that no matter the tariff outcome, the federal budget outlook remains grim. The CRFB has warned that the U.S. is on course to enter a “debt trap” where the average interest rate on all federal debt is projected to exceed the rate of nominal economic growth. “No matter what Trump does with tariffs, the budget outlook isn’t good,” Pomerleau said.

While the CRFB acknowledges Trump’s tariffs were “generating meaningful revenue amid a bleak fiscal situation,” they warn that “relying on uncertain legal authorities or temporary measures can weaken the stability of the tariffs that have been put in place.”

Instead, the watchdog urged policymakers to “enact revenue measures or offsets enough to fully replace the lost IEEPA revenue, and to formalize these changes—whether from tariffs or other sources—into law.”