US tariff receipts surge in Donald Trump's trade war
The figure represented a rise of more than 25 per cent from the previous month, while the total value of US goods imports remained broadly unchanged from April.
The figures suggest the president's trade war could provide a much-needed boost to the US government's coffers as Republicans in Congress secured passage of his flagship tax and spending bill.
The bill, which extends vast tax cuts from Mr Trump's first administration but makes steep cuts to public healthcare for low-income Americans, is forecast to add $3.4 trillion to the US government deficit over the next decade.
READ MORE
But the data also underscored the potential for his aggressive tariff increases to distort global trade flows.
Imports to the US from China fell to $19.3 billion, a 21 per cent drop from the previous month and 43 per cent down from the same month in 2024, reflecting a significant decline in trade between the world's two largest economies.
Earlier this year, Mr Trump imposed new tariffs of 145 per cent on all Chinese goods before cutting the rate to 30 per cent after US officials held talks with their Chinese counterparts in London and Geneva.
The slump in trade brought Chinese imports destined for domestic consumption to their lowest level in 19 years.
The US leader has particularly targeted China as he seeks to reshape global trade, saying both that he wants to bring manufacturing back to the US and that the levies will raise money and make the country 'very rich'.
Mr Trump has insisted that the revenues raised from tariffs can reduce reliance on income taxes. But despite the rise in sums collected, the receipts represented only about 7.7 per cent of May's federal deficit of $316 billion.
The deficit figure oscillates from month to month, however. The sum raised in May was equivalent to about 14.5 per cent of the typical $166 billion shortfall between federal spending and revenues over the past year.
Despite singling out China for the steepest tariffs, Mr Trump triggered a global stock market rout with April's so-called liberation day, when he unleashed tariffs of 10 per cent to 50 per cent on most US trading partners, before later temporarily lowering them to 10 per cent for 90 days.
Since April 9, a baseline rate of 10 per cent has been applied on almost all goods imports. Certain products, including pharmaceuticals and semiconductors, are exempted but may face a separate tariff in future, while steel, aluminium and automobiles are charged a higher rate of 25 per cent to 50 per cent.
If the 90-day pause expires as planned on July 9, the US is set to increase tariffs on dozens of countries without special agreements. Mr Trump has threatened the EU with a 50 per cent levy if a deal is not reached, while Vietnam has successfully negotiated a 20 per cent rate, down from the original 46 per cent the US had threatened to impose.
The effective tariff rate, calculated as the average duty raised across all imports as a share of their value, increased to 8.8 per cent in May, its highest figure since 1946. For Chinese goods, the tariff rate reached a record 48 per cent.
At the end of May, the US doubled steel and aluminium tariffs to 50 per cent and later expanded its definition to include steel derivative products such as freezers, dishwashers and washing machines.
Analysis by Yale Budget Lab suggests that if the rates in place as of June 16 were to remain, with no further increase on July 9, the effective tariff rate would settle at about 15 per cent, even after accounting for changes in consumer behaviour.
Taking into account various effects of the tariffs on the US economy, the think-tank projected that the current tariff policy would raise $2.2tn between 2025 and 2034, but thanks to reductions in tax revenue streams elsewhere, would result in net revenues of $1.8tn during those years.
Although a large sum, it is significantly less than the $3.4 trillion forecast to be added to US federal debt over the same period by implementing Mr Trump's tax bill, according to estimates from the Congressional Budget Office. – Copyright The Financial Times Limited 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Irish Examiner
2 hours ago
- Irish Examiner
AI screening of J1 students' social media 'prone to error', says Irish-American lobby group
A prominent Irish-American lobby group has hit out at the new requirements for J1 visas, and raised fears that artificial intelligence screening of social media accounts will be 'used extensively and is prone to error'. The Ancient Order of Hibernians said it had 'deep concerns' over the US Government directive requiring a review of up to five years of social media activity for every J1 visa applicant, which gives consular officers 'broad discretionary authority'. 'But without clear, objective criteria — and human oversight of AI screenings — we risk eroding the integrity of the J-1 Exchange Visitor Program, chilling participation among young applicants, depriving US government, businesses, educational and cultural institutions of essential summer interns, and weakening the longstanding ties that bind our nations,' its political education chair Neil F Cosgrove said. Irish students usually travel in large numbers to the United States each summer on J1 visas but, under the Trump administration, they now have to adjust the privacy settings on all their social media profiles to public. The US State Department recently announced it would now 'conduct a comprehensive and thorough vetting, including online presence, of all student and exchange visitor applicants' under the new guidance. The Ancient Order of Hibernians said given the way this vetting could be applied, this policy threatens one of America's most successful cultural and economic partnerships with Ireland. It said that officers may reach 'inconsistent decisions' as terms like 'hostility' and 'advocacy', which are meant to be flagged during screening, lack objective benchmarks. For students, the five-year look back on their social media will reach back to their early teens and could lead to treating youthful social media activity before maturity as some form of a security threat to the US, it said. It went on: 'Given the volume of applicants and the vast data set — five years of social media activity per person — we anticipate AI screening will be used extensively and is prone to error. 'In April 2025, PhD student Suguru Onda was wrongly flagged by an AI-driven criminal records check over a minor fishing limit citation in his home country of Japan, leading to an abrupt visa cancellation.' In the case of Mr Onda, his visa was reinstated but J1 students could find themselves already sent home before an error is corrected. The group added that the programme helps to fuel critical US sectors such as hospitality and tourism and businesses on the ground would feel the loss of Irish summer workers. It called on congress and policymakers to exclude any social media content from before someone turned 18, while requiring actual human checks of AI-generated flagged content along with a quarterly report on the use of AI screenings. Aontas na Mac Léinn in Éirinn (Amlé), formerly the Union of Students in Ireland, has also raised significant concerns about the measures and said they send a "damaging signal". Read More US visa crackdown is an assault on students' rights
Irish Times
3 hours ago
- Irish Times
Democrats react with fury as Trump's Bill passes
Democrats have erupted in a storm of outrage over the passage of Donald Trump 's budget bill, delivering scathing critiques that offered signs of the attack lines the party could wield against Republicans in next year's midterm elections. Party leaders released a wave of statements after the sweeping tax and spending Bill's passage on Thursday. 'Today, Donald Trump and the Republican Party sent a message to America: if you are not a billionaire, we don't give a damn about you,' said Ken Martin, the Democratic National Committee chair. 'While the GOP continues to cash their billionaire donors' checks, their constituents will starve, lose critical medical care, lose their jobs – and yes, some will die as a result of this Bill. Democrats are mobilising and will fight back to make sure everybody knows exactly who is responsible for one of the worst bills in our nation's history.' READ MORE The Bill's narrow passage in the House of Representatives on Thursday, with no Democratic support and only two no votes from Republicans – which came from Thomas Massie of Kentucky and Brian Fitzpatrick of Pennsylvania – is 'not normal', wrote congresswoman Alexandria Ocasio-Cortez. While the GOP continues to cash their billionaire donors' checks, their constituents will starve, lose critical medical care, lose their jobs — Ken Martin, the Democratic National Committee chair Ms Ocasio-Cortez highlighted the contradictions in the Bill that Democrats can be expected to campaign on over the next two years, pitting its spending on immigration enforcement against the loss of social benefits for working-class Americans. She noted that Republicans voted for permanent tax breaks for billionaires while allowing a tax break on tips for people earning less than $25,000 a year to 'sunset' in three years. She also noted that cuts to Medicaid expansion will remove tipped employees from eligibility and remove subsidies for insurance under the Affordable Care Act, and reduce Snap food assistance benefits. 'I don't think anyone is prepared for what they just did with Ice [Immigration and Customs Enforcement],' Ms Ocasio-Cortez wrote on Bluesky. 'This is not a simple budget increase. It is an explosion – making Ice bigger than the FBI, US Bureau of Prisons, [the] DEA and others combined. It is setting up to make what's happening now look like child's play. And people are disappearing.' Many critics referred to choice remarks made by Republicans in the run-up to the Bill's passage that displayed an indifference to their voters' concerns. Senator Mitch McConnell was reported by Punchbowl News to have said to other Republicans in a closed-door meeting last week: 'I know a lot of us are hearing from people back home about Medicaid. But they'll get over it.' And Republican senator Joni Ernst, of Iowa, speaking at a combative town hall in Parkersburg in late May, responded to someone in the audience shouting that people will die without coverage by saying, 'People are not ... well, we all are going to die' – a response that drew groans. Cuts to the Medicaid health programme feature prominently in Democratic reaction to the Bill. Congresswoman Rashida Tlaib described the Bill as 'disgusting' and 'an act of violence against our communities'. She said: 'Republicans should be ashamed for saying, 'Just get over it' because 'We're all going to die'. They are responsible for the 50,000 people who will die unnecessarily every year because of this deadly budget.' Budget hawks on the left and the right have taken issue with the effects the Bill will have on the already considerable national debt. 'In a massive fiscal capitulation, Congress has passed the single most expensive, dishonest, and reckless budget reconciliation bill ever – and, it comes amidst an already alarming fiscal situation,' wrote Maya MacGuineas, the president of the oversight organisation Committee for a Responsible Federal Budget. 'Never before has a piece of legislation been jammed through with such disregard for our fiscal outlook, the budget process, and the impact it will have on the wellbeing of the country and future generations.' – Guardian
Irish Times
4 hours ago
- Irish Times
European shares dip ahead of US tariffs
European shares ended lower on Friday as losses in banks and mining-related stocks weighed, with focus now shifting to the July 9th deadline for trading partners to reach a deal with the United States. US President Donald Trump said Washington will start sending letters with tariff rates to countries on Friday, subduing markets globally. With Trump's 90-day pause on higher US tariffs ending next week, investors have taken a cautious stance as several large trading partners, including the European Union (EU), are yet to secure trade deals. Dublin The Irish index of shares closed the week marginally lower, falling 0.33 per cent to end the week at 11,320. READ MORE The main banking stocks edged lower, mirroring the decline in the wider market and trends elsewhere in Europe. AIB was just under half a per cent lower by the end of the day, clawing its way back to €6.82 after hitting a low of €6.82 early in the session. Bank of Ireland was down 0.37 per cent, after an early high of €12.22 dipped to a €12.04 low, settling down at €12.12. Permanent TSB ended the day up almost 1 per cent, but volumes were thin in comparison. Food groups Kerry and Glanbia were both off, with the latter down 0.39 per cent and the former shedding 0.16 per cent. Shares in insulation specialist Kingspan were marginally higher, gaining back some of the ground it lost on Thursday, ending the day at €70.90. Hotel group Dalata Hotel shed 0.15 per cent over the day, and airline Ryanair fell 0.55 per cent. The airline has been hampered by strike action among French air traffic controllers over the past two days, leading to the cancellation of more than 400 flights. London London's main stock indexes closed mixed on Friday, with investors assessing domestic fiscal worries and the rate cut path. The blue-chip FTSE 100 was unchanged on the day but notched up a second weekly gain, while the domestically-focused FTSE 250 lost 0.7 per cent on Friday and ended the week lower. Home builder stocks led sectoral losses on Friday, dropping 2.1 per cent after MJ Gleeson warned of profit being at the lower end of market expectations for fiscal 2026 due to subdued demand. The group slumped 6.7 per cent and was the top decliner on the smallcap index. Larger peers Vistry, Persimmon and Taylor Wimpey fell 2.8 per cent, 1.3 per cent and 1.6 per cent, respectively. Industrial metal stocks fell, tracking lower metal prices. Anglo American, Antofagasta and Glencore slipped more than 1 per cent each. Atalya lost 3 per cent. Among individual stocks, greeting card and gifting retailer Moonpig fell 8.7 per cent to the bottom of the midcap index after a rating downgrade by Deutsche Bank. Europe The pan-European STOXX 600 index closed 0.5 per cent lower, clocking a marginal weekly fall. Other regional indexes also declined, with Germany's DAX down 0.6 per cent and France's CAC 40 losing 0.8 per cent. Spain's benchmark lagged with a 1.5 per cent fall. Euro zone banks slid 1,3 per cent, with Spain's BBVA topping declines at a 2.6 per cent fall. Helping limit losses, healthcare advanced 1.1 per cent. Drugmakers Novartis, Roche and Novo Nordisk – some of the biggest weights on the STOXX 600 – all clocked gains. Shares of French spirits makers Pernod Ricard, Remy Cointreau and LVMH – the owner of Hennessy – all finished well off their session lows after China spared major cognac producers from new duties on EU brandy, provided they sell at a minimum price. Despite a roaring start to the year, European shares fell behind the US S&P 500 on year-to-date basis on Friday, driven dominantly by tech shares. The STOXX 600 was last up 6.6 per cent for 2025, compared with the 6.7 per cent advance for the S&P 500. Among individual stocks, Germany's Rheinmetall advanced 3.3 per cent after JP Morgan and Deutsche Bank raised their price targets on the defence contractor. New York The US markets were closed due to the July 4th holiday.
