Trump’s Latest Tariff Plan Could Raise $1.5 Trillion

President Trump has announced that he is planning to impose a 10 percent tariff on all imports from China and a 25 percent tariff on imports from Mexico and Canada starting on February 1. Assuming these are minimum tariffs on goods currently facing less in tariffs, we estimate these policies would increase revenue by about $140 billion over the rest of Calendar Year (CY) 2025. If made permanent, we estimate they would raise $1.5 trillion through Fiscal Year (FY) 2035 on a conventional basis. Accounting for economic effects, we estimate they would raise $1.3 trillion through 2035.

Revenue Raised from Proposed Tariffs

Policy CY 2025 FY 2025-2035 
10% Tariff, China $10 billion $150 billion
25% Tariff, Mexico $70 billion $700 billion
25% Tariff, Canada $60 billion $600 billion
Total Revenue (conventional) $140 billion $1.5 trillion
     
Total Revenue (dynamic) $140 billion $1.3 trillion
     
Total Revenue if “additional” instead of “minimum” tariffs (conventional) $150 billion $1.6 trillion

Sources: Committee for a Responsible Federal Budget estimates mainly based on data from the Congressional Budget Office (CBO) and U.S. Census Bureau. 
Notes: Numbers are rough and rounded to the nearest $10 billion in CY 2025 and to $50 billion through FY 2035 for individual policies and $100 billion for "Total Revenue" estimates. Conventional estimates reflect the average of scenarios where lost trade is and isn’t diverted to other trading partners. Conventional estimates assume tariffs would reduce import levels consistent with elasticities derived from research and that all gained tariff revenue would be subject to income and payroll tax revenue offsets. For diversion estimates, diverted imports are subject to elasticities to the degree that tariffs on imports from other countries have also risen. Impacts on the economy are roughly created using CBO estimates as a reference, and the resulting revenue impacts assume GDP losses are due to productivity losses.
 

Although we assume these would be “minimum” tariffs, it is also possible President Trump would impose “additional” tariffs – effectively increasing the tariff rate on all Chinese imports by 10 percentage points and on all Mexican and Canadian imports by 25 percentage points. In that case, we estimate the tariffs would raise $150 billion in calendar year 2025 and $1.6 trillion ($1.4 trillion dynamic) through FY 2035, if made permanent.

Importantly, our estimates including dynamic and retaliatory effects on revenues are very rough and meant to convey the magnitude of their effects rather than precise scores. Based on available data from the Congressional Budget Office, we assume these tariffs would reduce U.S. output by about 0.3 percent once phased in. There is great uncertainty regarding the actual effects.

The estimates here closely match those in our Budget Offsets Bank and differ primarily due to the inclusion of the remainder of 2025 in the policy window.

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