President Donald Trump’s aggressive tariff strategy is delivering a windfall to the U.S. Treasury, according to Secretary Scott Bessent, who now estimates customs duties could generate over $500 billion annually — and possibly even approach $1 trillion.
Speaking at a White House Cabinet meeting, Bessent admitted his earlier projection of $300 billion in annual tariff revenue had fallen short.
“We had a substantial jump from July to August, and I think we’re going to see a bigger jump from August to September,” Bessent said. “We could be well over half a trillion — maybe toward a trillion-dollar number. This administration has made a meaningful dent in the budget deficit.”
Tariffs Offset Deficit From Tax Cuts
The surge in tariff revenue comes as Republicans’ tax cut and spending bill — signed into law earlier this year — is projected to increase the deficit by $3.4 trillion over the next decade, according to the Congressional Budget Office. Trump’s tariffs are helping to close that gap.
In July, the U.S. collected $21 billion in customs duties — up sharply from $7 billion in July 2024. By August 22, customs and excise tax collections had already reached $29.6 billion, matching July’s full-month total. That figure is expected to climb even higher by the end of the month.
CBO Raises Deficit Reduction Estimate
The CBO recently revised its forecast to project that Trump’s tariff program will cut the federal deficit by $4 trillion over 10 years, up from $3 trillion in its June forecast.
Bessent suggested even that number could rise further: “I would expect that that number could go up from here,” he told Cabinet officials.
Trump’s full-scale tariff realignment — including sweeping increases imposed on nearly all major trading partners beginning August 7 — has already begun reshaping America’s fiscal outlook, turning trade penalties into a major revenue engine.
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