- So far this year, the U.S. Treasury has collected $15 billion more in tariffs than it expected at the start as importers raced to get shipments in before even higher tariffs take effect. But economists warn it’s too soon to declare policy victory as many expect shipments to dry up later this year.
President Donald Trump’s rapidly shifting tariff policy has upended the economy, sent companies into a panic, and created wild swings in the markets. But there’s at least one area where the tariff surprise has been positive: The nation has taken in more tariff income than expected so far this year.
According to the Penn-Wharton Budget Model, which uses data from the Treasury and estimates from the Congressional Budget Office, the U.S. has taken in nearly $15 billion more in tariffs as of this week than the CBO had projected. Tariff revenue as of April stood at $69 billion, substantially higher than the $55 billion the CBO penciled in.
A combination of tariff rates that have risen since the CBO’s January estimate and importers rushing to get shipments before even-higher rates kick in have boosted the tariff take, said Kent Smetters, faculty director of the Penn-Wharton Budget Model.
“Even as higher rates have been announced for later in the year, people have been trying to get [imports] in before then,” he said.
Still, a $15 billion swing, while unfathomably large for most people, is a mere drop in the vast ocean of the federal budget. Last year, the federal government spent $6.75 trillion and took in $4.9 trillion in revenue.
“For tariff revenue, it’s certainly a lot, but relative to the entire size of the budget, it’s trivial at this point,” Smetters said.
Despite the modest tariff boost, it’s too soon to tell if trade policy is working, Penn-Wharton economists noted. For one, the specifics remain in flux: many of the tariffs Trump threatened are currently on hold until July to allow for negotiations while others are quietly being rolled back. Meanwhile, shipments from China have already slowed markedly, according to data from ports. Because of the time it takes for shipments to make it around the U.S., though, economists warn it will take weeks or months for this falloff to be felt by consumers.
Alexander Arnon, director of policy analysis at Penn-Wharton, likened the tariff revenue pop to a statistical quirk similar to the negative first-quarter GDP figure that was heavily skewed by a surge in imports in the first three months of the year.
“This jump in customs duties is in fact a sign of the disruption that is being caused here, not necessarily a sign that it’s working,” said Arnon.
“Businesses are stockpiling—that seems to be the dominant factor in driving up customs duties,” Arnon said. “It’s too soon to say that everything is working out as planned even though tariffs are up and the economy has not collapsed.”
Over the next decade, Penn-Wharton projects the U.S. will gain $5.1 trillion in revenue. Even if all that money went to paying down the deficit, however, Smetters suggests it would be an economic loss for the country.
“If net imports actually go down, as we expect, that will have a big negative impact on our ability to sell capital,” Smetters said. That means there will be fewer buyers of U.S. Treasury bonds, which will effectively increase interest rates and make borrowing more expensive.
“The cost of capital is going to increase quite a bit for U.S. companies,” he said.
