The CBO projects that 2025 tariffs will reduce the U.S. budget deficit by $2.8 trillion over 10 years. Tariffs will save $500 billion in interest payments by lowering federal borrowing needs. Inflation will rise just 0.4 percentage points annually in 2025–2026, despite sweeping new tariffs. $81.4 billion in tariff revenue has already been collected this fiscal year—more than all excise taxes combined—and up 65.1% from last year. Tariffs are a more economically sound way to raise revenue—shifting the burden from American wages to foreign production.

Tariffs offer a clear shift in the structure of taxation. Instead of taxing wages and production here at home, they tax the value of goods produced abroad and dumped into our markets, undermining American manufacturers. That’s a fairer model—one that rewards work and production, not outsourcing. For too long, the U.S. tax code has favored financial speculation, global arbitrage, and foreign sourcing. Income and payroll taxes punish the very people and businesses that sustain our economy. Tariffs reverse that trend by rewarding domestic production and discouraging offshoring.

Moreover, the revenues from tariffs can be strategically deployed to reduce those very tax burdens. Tariff revenue can be used to fund middle-class tax relief, invest in infrastructure and R&D, or reduce the national deficit—all without forcing austerity or triggering inflation.

For example, a 2024 CPA study found that just a 10% “universal” tariff on all U.S. imports would generate an estimated $263 billion in annual revenue. This could be used to provide a substantial $1,200 tax refund to lower-income households and refunds equal to 3% to 4% of income for middle-income households.

Read the article.