Where Will Trump’s Tariff Revenues Go? His First Term Provides a Big Clue.

“China [is] paying billions and billions of dollars” on U.S. tariffs, President Trump said in his debate with Joe Biden back in October 2020, late in his first term. “And you know who got the money? Our farmers. Our great farmers.”

He was half right. 

Since 2018, Trump has repeatedly insisted that China paid the tariffs he imposed on Chinese imports. This claim is false—the tariffs were paid entirely by U.S. importers. But he was right in saying that American farmers got the money.

To compensate farmers suffering retaliatory tariffs on U.S. agricultural exports, Trump authorized “relief” payments to them totaling an enormous $61 billion. This represents nearly all—92 percent—of the tariffs on Chinese goods paid by U.S. importers from 2018 to 2020.

During the 2024 presidential campaign, Trump claimed that tariff revenues paid by foreign nations during his second administration would be so enormous that they could replace the federal income tax. Those tariffs will neither be paid by foreigners nor be anywhere near sufficient to replace income-tax revenue—which is about $2 trillion annually.  Instead, expect much if not all of the tariff money paid by U.S. importers to be transferred to angry farmers facing yet another round of foreign retaliation.