Trump says his tariff revenues will both pay down America’s $37 trillion debt and possibly fund a public “dividend,” but Treasury data shows they fall short of even covering monthly interest costs.
In exclusive interviews with Fortune, Wharton’s Professor Joao Gomes and AEI’s Desmond Lachman warned that while tariffs may slow debt growth, they won’t meaningfully reduce it.
Markets are largely skeptical of Trump’s math despite some unconventional revenue wins.
Yale economist interviewed by the NYT has a slightly more nuanced opinion:
“In a world where I think we are fiscally unsustainable, debt to gross domestic product is rising much too quickly. Part of the reason for that is the tax bill that was passed last month, but it’s rising. Finding ways to raise $3 trillion is a feat, and that’s just a fact.”
(She estimates $3T from tariffs)
Wow, $3T is a lot for the American consumer to pay. Does that assume payment from places that have just decided to not do business at all with the US?
Tariff revenues come from the importers, so it assumes payment from the Americans who can no longer afford to import the now-too-expensive foreign goods.