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Newsweek
12 hours ago
- Business
- Newsweek
Trump Tariff Revenue Soars in May
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. President Donald Trump's aggressive tariff policy has triggered widespread economic disruption, from rising prices for American consumers to retaliatory measures from key trading partners. Yet despite the global fallout, the administration's tariff push is delivering a surprising result at home. As of May 30, the U.S. is on pace to set a new monthly record in tariff revenue—nearly $23 billion, about three times the amount collected in May 2024. That record-breaking pace contributes to a total of $68.23 billion collected so far in 2025, a 78 percent jump from the same point last year, according to Treasury Department data analyzed by the Penn Wharton Budget Model. Why It Matters Trump has defended his tariff policy as a means to restore American manufacturing as well as a way to fund the government without relying on income taxes. His administration argues that tariffs will make it possible to eventually abolish the federal income tax altogether. The White House continues to radiate optimism that negotiated deals with other countries will occur despite Trump's claims that he will set his own deals and a lack of clarity about how the process goes forward. U.S. President Donald Trump speaks during the Memorial Day wreath-laying ceremony at the Memorial Amphitheater in Arlington National Cemetery on May 26, 2025 in Arlington, Virginia. Memorial Day is observed on the last Monday in... U.S. President Donald Trump speaks during the Memorial Day wreath-laying ceremony at the Memorial Amphitheater in Arlington National Cemetery on May 26, 2025 in Arlington, Virginia. Memorial Day is observed on the last Monday in May each year to honor and mourn U.S. military personnel who died while serving in the United States Armed Forces. More Photo byWhat To Know The revenue increase is driven by steep duties imposed on imports, particularly from China, where tariff rates have climbed as high as 145 percent. The Penn Wharton analysis shows a significant monthly spike in revenue of $6.8 billion at the end of April, highlighting the impact of new levies or preemptive stockpiling by businesses ahead of expected rate hikes. While such figures bolster the administration's argument that tariffs can serve as a major funding source, the underlying mechanism of who pays is less direct. Tariffs are a tax on imports, meaning they are initially paid by U.S. companies at the border, but economic research shows these costs are ultimately passed on to American consumers through higher prices. The Budget Lab at Yale University projects that the full suite of tariffs enacted in 2025—if kept in place—would raise $2.7 trillion over the next decade. However, the same analysis estimates a corresponding $394 billion reduction in other tax revenue due to negative effects on economic output. It calls the current average effective tariff rate of 17.8 percent the highest since 1934. The Budget Lab warns that tariffs work like a regressive tax, hurting low-income families the most. It estimates that households in the second income decile would lose about $1,300 a year from higher prices, while those in the top decile would lose around $6,100. Overall, consumer costs would rise by 1.7 percent in the short term—roughly a $2,800 hit per household. Clothing and textiles are especially impacted: prices for shoes have climbed 15 percent, and apparel is up 14 percent in the short term. The long-run impact keeps prices 19 percent and 16 percent higher, respectively. The Tax Foundation, an international research think tank based in Washington D.C., echoes those concerns, warning that the projected $2.1 trillion in tariff revenue through 2034 will come at a significant cost: a 0.8 percent long-run reduction in U.S. economic output and 685,000 fewer full-time jobs. Their analysis underscores the fragility of relying on tariffs to offset other costs—particularly Trump's "One Big Beautiful Bill," which extends and expands tax cuts from the 2017 Tax Cuts and Jobs Act at an estimated $4.5 trillion cost over the same period, or more than double the Tax Foundation's optimistic estimate for tariff revenues. What People Are Saying Joseph Foudy, professor at NYU's Stern School of Business, told Newsweek: "We're essentially picking fights with every major country in the world. Even if we end up cutting deals, the level of acrimony and the signal that the U.S. is no longer a reliable long-term partner weakens our position." Todd Belt of George Washington University's Graduate School of Political Management told Newsweek: "The industrial landscape in the U.S. has completely changed. Most heavy industry has left the country, along with many well-paying, middle-class, union jobs. That's created a lot of resentment. Trump is promising to bring those jobs back—though I don't think that's realistic—and tariffs are his way of doing it". Scott Bessent, Treasury Secretary, in an interview with Fox News: "We were on track for a financial crash. Government spending was out of control. It felt like 1998 or 2007. We've pulled off that path and set up long-term growth instead." What Happens Next The revenue numbers come as the legal foundation of Trump's tariff strategy isremains wobbly. A federal court ruled that the president's use of the International Emergency Economic Powers Act to impose some tariffs was unlawful. However, an appeals court has allowed the reciprocal tariffs to remain in place while the case winds through the appeal process. It could end up at the Supreme Court.
Yahoo
3 days ago
- Business
- Yahoo
Musk says he's ‘disappointed' with Trump-backed megabill
Elon Musk seems to be unhappy with the sweeping spending bill narrowly passed by the House at the urging of President Donald Trump. Musk, in unusual criticism of a cause favored by his ally the president, said in an interview excerpt released Tuesday that the Trump-backed 'Big Beautiful Bill' contradicts the goals of his Department of Government Efficiency. 'I was disappointed to see the massive spending bill, frankly, which increases the deficit, not just decreases it, and undermines the work that the DOGE team is doing,' the billionaire Tesla CEO said in an interview with CBS scheduled to run in full on Sunday. The megabill, which passed through the House by a single vote last week, incorporates much of Trump's domestic agenda on tax cuts, immigration and other matters. 'I think a bill can be big, or it can be beautiful, but I don't know if it can be both, in my personal opinion,' he added. Musk launched DOGE with a promise of $2 trillion in savings. It has hollowed out or shut down 11 federal agencies and about 250,000 federal workers have left their jobs and says it has saved the taxpayers $160 billion. Meanwhile, total government spending has increased, according to the nonpartisan Penn Wharton Budget Model, which tracks weekly Treasury data. The billionaire's criticism could influence the eventual content of the megabill, which faces uncertain prospects in the Senate. Republican Wisconsin Sen. Ron Johnson, a Trump ally, is pushing for deeper cuts to reduce the deficit. Others in the GOP object to the extent of Medicaid cuts in the legislation and the rollback of Inflation Reduction Act tax credits.
Politico
3 days ago
- Business
- Politico
Musk says he's ‘disappointed' with Trump-backed megabill
Elon Musk seems to be unhappy with the sweeping spending bill narrowly passed by the House at the urging of President Donald Trump. Musk, in unusual criticism of a cause favored by his ally the president, said in an interview excerpt released Tuesday that the Trump-backed 'Big Beautiful Bill' contradicts the goals of his Department of Government Efficiency. 'I was disappointed to see the massive spending bill, frankly, which increases the deficit, not just decreases it, and undermines the work that the DOGE team is doing,' the billionaire Tesla CEO said in an interview with CBS scheduled to run in full on Sunday. The megabill, which passed through the House by a single vote last week, incorporates much of Trump's domestic agenda on tax cuts, immigration and other matters. 'I think a bill can be big, or it can be beautiful, but I don't know if it can be both, in my personal opinion,' he added. Musk launched DOGE with a promise of $2 trillion in savings. It has hollowed out or shut down 11 federal agencies and about 250,000 federal workers have left their jobs and says it has saved the taxpayers $160 billion. Meanwhile, total government spending has increased, according to the nonpartisan Penn Wharton Budget Model, which tracks weekly Treasury data. The billionaire's criticism could influence the eventual content of the megabill, which faces uncertain prospects in the Senate. Republican Wisconsin Sen. Ron Johnson, a Trump ally, is pushing for deeper cuts to reduce the deficit. Others in the GOP object to the extent of Medicaid cuts in the legislation and the rollback of Inflation Reduction Act tax credits.
Boston Globe
6 days ago
- Business
- Boston Globe
Pivoting from tax cuts to tariffs, Trump ignores economic warning signs
Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up Related : Advertisement Since taking office, Trump has raced to enact his economic vision, aiming to pair generous tax cuts with sweeping deregulation that he says will expand America's economy. He has fashioned his steep, worldwide tariffs as a political cudgel that will raise money, encourage more domestic manufacturing and improve U.S. trade relationships. But for many of his signature policies to succeed, Trump will have to prove investors wrong, particularly those who lend money to the government by buying its debt. Advertisement So far, bond markets are not buying his approach. Where Trump sees a 'golden age' of growth, investors see an agenda that comes with more debt, higher borrowing costs, inflation and an economic slowdown. Investors who once viewed government debt as a relatively risk-free investment are now demanding that the United States pay much more to those who lend America money. That is on top of businesses, House Speaker Mike Johnson (R-La.) spoke after the passage in the House of the One Big Beautiful Bill Act, on Thursday. KENNY HOLSTON/NYT Still, Trump continues to proclaim that his policies will bring prosperity. This past week, the White House released data showing that its tax cuts could increase U.S. output as much as 5.2% in the short term, compared with the gains it would have achieved if the bill is not adopted. The administration has stood largely alone in offering such rosy predictions about the effects of Trump's policies on businesses, average workers and the nation's fiscal future. In report after report, economists this past week predicted that Trump's signature tax package could Related : Advertisement The tax cuts are largely an extension of ones that Congress passed in 2017, meaning that few taxpayers will see an increase to their after-tax income. In fact, some might see their financial situation deteriorate: Many of the lowest earners may even see about $1,300 less on average under the Republican bill in 2030, according to the nonpartisan Penn Wharton Budget Model, which factored in the proposed cuts to federal safety-net programs. Facing an onslaught of red flags and dour reports, the White House has remained bullish. 'I think folks have cried wolf a lot,' Stephen Miran, chair of the president's Council of Economic Advisers, said in an interview, stressing that Trump's agenda would 'grow the economy.' In the past, investors and businesses might have rejoiced over Trump's grand proclamations about lowering taxes, reducing regulations and opening access to foreign markets. But the most common reaction this past week was concern over Trump's sclerotic approach, which has renewed fears that the economy could enter a prolonged period of pain. 'It's possible that you're going to get a big benefit to growth, but the costs are so obvious and so clear that I think it's hard to put a lot of faith in that at the moment,' said Eric Winograd, an economist at the investment firm AllianceBernstein. By most metrics, Trump inherited a solid economy. Layoffs were low when he took office and have stayed that way, helping to keep the unemployment rate stable. And consumers, even amid elevated prices, continued to spend apace. Four months into his second term, however, there are signs that the economy is beginning to come under greater strain, in what experts worry is a prelude to a more substantive slowdown. Although economists do not expect the economy to tip fully into a recession, they say Trump's tariffs in particular have raised the odds of a downturn, as both businesses and consumers begin to cut back. Advertisement Shipping containers at a port in Ho Chi Minh, Vietnam, on April 28. Many businesses, including Walmart, have said they may have to raise prices as a result of Trump's global trade war. LINH PHAM/NYT Many of the president's allies maintain that Trump is doing exactly as he promised during the 2024 presidential campaign, acting out of a belief that his vision can spur robust economic growth. In doing so, that can help to create jobs, raise wages and generate the sort of activity that can lessen the nation's fiscal imbalance, said Stephen Moore, a conservative economist who served as one of Trump's advisers during his first term. Some businesses have forecast price increases as a result of Trump's tariff threats. A report this past week from Allianz found that many businesses are trying to push the added tariff costs onto suppliers or consumers, with roughly half of its survey respondents saying they may increase prices. The potential for rising prices while growth is slowing poses a unique challenge for the Fed and its voting members, forcing them to reconcile with conflicting missions — a goal to pursue low, stable inflation, and a desire to sustain a healthy labor market. 'The bar for me is a little higher for action in any direction while we're waiting to get some clarity,' Austan Goolsbee, president of the Chicago Fed and a voting member on this year's rate-setting committee, told CNBC on Friday. Goolsbee recalled a recent exchange with the CEO of a construction business, who said: 'We're now in a put-your-pencils-down moment.' Businesses, Goolsbee said, now 'have to wait if every week or every month or every day there's going to be a new major announcement.' Advertisement 'They just can't take action until some of those things are resolved,' he added. This article originally appeared in .
Gulf Today
24-05-2025
- Business
- Gulf Today
The hidden moral cost of America's tariff crisis
In the spring of 2025, as American families struggle with unprecedented consumer costs, we find ourselves at a point of "moral reckoning." The latest data from the Yale Budget Lab reveals that tariff policies have driven consumer prices up by 2.9% in the short term. In comparison, the Penn Wharton Budget Model projects a staggering 6% reduction in long-term GDP and a 5% decline in wages. But these numbers, stark as they are, tell only part of the story. The actual narrative is one of moral choice and democratic values. Eddie Glaude describes this way in his book 'Democracy in Black': Our economic policies must be viewed through the lens of ethical significance — not just market efficiency. When we examine the tariff regime's impact on American communities, we see economic data points and a fundamental challenge to our democratic principles of equity and justice. Far too often, the burden of such policies falls disproportionately on those who are least able to bear it. Black Enterprise reports that Black-owned businesses face a dual challenge: economic survival and preserving their role as community anchors. The average American household is preparing to shoulder an additional $3,800 annual costs. Still, this figure masks a more profound inequity — BIPOC communities and working-class families spend a higher percentage of their income on consumer goods, meaning they bear a disproportionate share of the tariff burden. The state of our economic solvency is particularly crucial because it intersects with a concept known as the 'value gap." The value gap is a premise that white(ness) lives are valued more than others, which Gluade argues remains embedded in our economic and legislative policies. Trump's enacted tariffs' disparate impact on ethnic and uniquely diverse-owned businesses isn't merely coincidental; it reflects more profound structural inequities in our financial system. Small businesses, particularly those in marginalized communities, face existential threats. According to Small Business Majority, 53% of small companies are concerned about tariffs' negative impacts. These aren't just statistics — they represent community pillars, generational wealth builders, and engines of local economic mobility. Adherence to a moral imperative requires us to move beyond purely economic calculations. It invites deeply reflective and prophetic questioning of ourselves and our systems. We must ask: What kind of society do we wish to be? How do our trade policies reflect our values? The answer lies not in protectionist rhetoric but in "democratic practices" — policies that strengthen communities rather than fracture them. Many economists forecast that 72% of small businesses anticipate higher prices; we are not just seeing market dynamics at work. The country is witnessing the erosion of community resilience, the narrowing of economic opportunity, and the weakening of social bonds that sustain democratic life. Finding sound solutions requires reimagining our economic policies through a moral lens and prioritizing equity and community well-being. Hence, developing trade policies that: * Recognize the interconnected nature of economic justice and democratic health * Account for disparate impacts on marginalized communities * Support rather than undermine local economic ecosystems * Prioritise long-term community stability over short-term political gains The potential impact of the proposed tariff on US communities and consumers could not result in economic consequences. Such tariffs bring to bear a moral crisis that demands a response grounded in principled and practical solutions. Pathways forward are possible with increased economic adjustments; they fundamentally rethink how we value community, equity, and democratic participation in financial decisions. A democracy's economy ought to be more than just market efficiency. It should be morally courageous and committed to shared prosperity. Fierce debate over Trump-era tariffs transcends mere spreadsheets and GDP calculations. It is not an argument about trade deficits or quarterly economic indicators — it's a mirror reflecting our national identity and core values. When leaders indiscriminately slap tariffs on steel from Canada or solar panels from China, we're not just adjusting numbers on a balance sheet but making profound statements about how we view our place in the global community. Unfortunately, protectionist policies often hit hardest in unexpected places: the main street's mom & pop shops, rural American manufacturers who can't afford higher material costs, the local farmer watching crops rot because their usual markets have vanished, or the single parent facing steeper prices at the grocery store. Instead of retreating behind economic walls, policies that match the complexity of our times are essential — policies that protect American workers while staying true to our traditions of innovation, fair play, and economic opportunity for all. We are left to choose between continuing in a direction that exacerbates economic inequality and community fragmentation or embracing a vision of monetary policy as a moral practice that strengthens our democratic fabric while ensuring no community bears an unjust burden in our pursuit of economic security.
