Economists Say Tariffs Bring Revenue, But U.S. Debt Keeps Soaring
(MENAFN) A recent report by a magazine casts doubt on President Donald Trump’s claims that raising tariffs will significantly reduce America’s soaring $37 trillion national debt. While the president has touted tariff revenues as a solution to debt woes and even hinted at possible “dividends” for the American public, experts say these expectations are overly optimistic.
Trump recently asserted, “to pay down debt, which will happen in very large quantity,” adding, “we're taking in so much money that we may very well make a dividend to the people of America.”
However, economists cited by the magazine express strong skepticism. Joao Gomes, finance and economics professor at the Wharton School, told the magazine that while tariff revenue might offset some costs from the “One Big, Beautiful Bill Act,” which the Congressional Budget Office predicts will add $3 trillion to the debt by 2030, it won’t significantly reduce the overall national debt.
Desmond Lachman, senior fellow at the American Enterprise Institute, called Trump’s $300 billion revenue claim “a drop in the ocean” compared to the ballooning debt. “The country is on a really dangerous debt trajectory,” Lachman warned. He added that despite Trump’s framing of tariffs as job creators or debt reducers for political gain, “Markets aren't dumb. They can do the arithmetic and figure out that this is nonsense.”
The magazine report highlights that current tariff revenues fall far short even of covering the interest payments on U.S. debt. According to U.S. Treasury data, interest expenses reached $60.95 billion in July, while tariff income was only $29.6 billion. This gap underscores the challenge of relying on tariffs to alleviate the nation’s debt crisis.
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