Tariffs aren’t going to pay down the national debt

President Donald Trump has enacted his plan for how to pay down the national debt: raising tariffs on goods from other countries.

But the math is not on his side, The New York Times reports.

Trump contended over last weekend that the tariffs his administration has imposed on steel, aluminum and a variety of imported Chinese goods will soon begin to generate sufficient revenue to reduce the federal debt.

For this fiscal year, the Congressional Budget Office projects the federal budget deficit will be $800 billion. Trump’s Office of Management and Budget projects the deficit will top $1 trillion in 2019.

To pay down any of the debt tariffs need to bring in at least $800 billion this year.

The Treasury Department tracks how much revenue the United States collects from tariffs, and by its calculations that amount is going to clock in at about $40 billion as of 2018. That total number includes $35 billion that the Treasury has already taken in from tariffs over the past two years.
So the additional amount coming in this year, as a result of Mr. Trump’s tariffs, is about $5 billion, or 1/160th of what the country would need to begin retiring debt.
A proposed 25% tariff on $200 billion in additional imports from China would raise $50 billion a year. A proposed 25% tax on imported automobiles and auto parts would raise $85.25 billion. That’s a lot of money. It’s a boost to federal revenue, but it remains at least $664 billion short of the necessary amount need to start paying off debt if no other policies are changed.
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