Just over 100 days into President Donald Trump’s second term, his signature tariff policy, heralded as a tool to boost American manufacturing and reduce deficits, deserves a sober review. While the administration touts tariffs as a win for U.S. workers, early data paint a more complex picture, with modest revenue gains, declining manufacturing activity, and unintended economic consequences. For a policy sold as a cornerstone of economic renewal, the results so far raise questions about its effectiveness.
On April 8, U.S. Customs and Border Protection released a statement that says it has collected “over $200 million in additional [tariff] revenue” each day since Trump took office, tied to his “Liberation Day” trade policies. In a statement to CNBC on April 14, the agency reported that it had collected “more than $21 billion in total tariff revenue from 15 presidential trade actions implemented since Jan. 20, 2025.”
Extrapolating the $21 billion in revenue collected so far for the rest of the year, tariff revenue for 2025 would reach $91 billion. While this is more than the $77 billion collected in 2024, it is significantly less than the $270 billion per year that the Congressional Budget Office projected from Trump’s original tariff plan and an even farther cry from adviser Peter Navarro’s claim of $600 billion to $700 billion per year.
This gap highlights a serious challenge for the administration, which has touted tariffs as a panacea capable of reducing federal deficits and, in the extreme case, even replacing the federal income tax revenue. In 2024, the federal government collected about $2.5 trillion in income tax revenue, which is more than triple even Navarro’s ambitious claims.
The global response to these tariffs further complicates the picture. The U.S. effective tariff rate has risen from 2.5% to 11.5%, yet revenue has grown by only 18%. This suggests trading partners are shipping fewer goods to the United States, likely due to higher costs. Meanwhile, other nations are forging free trade agreements that exclude the U.S., sidelining American businesses in global markets. Far from strengthening America’s trade leadership, tariffs risk isolating the U.S. economy.
The paltry increase in tariff revenue thus far could be excused with a large enough increase in manufacturing jobs. However, early data suggest this is not the case, either. In its latest Business Outlook Survey, the Philadelphia Federal Reserve reports that manufacturing output declined; general activity, new orders, and shipments all fell and turned negative; and 80% of firms were either seeing no growth or actual decreases in activity.
The Empire State Manufacturing Survey from the New York Fed echoes these sentiments, reporting that general business conditions, new orders, shipments, and unfilled orders have all fallen into the negatives. Volvo, for example, is set to lay off hundreds of workers in Pennsylvania and Maryland because “orders are down amid market uncertainty.” General Motors is set to lay off 700 workers in the U.S. and Canada, and U.S. steel company Cleveland-Cliffs laid off 1,200 workers recently in an attempt to mitigate the effects of the Trump administration’s tariffs on steel and auto imports.
ECONOMY SHRANK IN FIRST QUARTER, SIGNALING MAJOR WARNING
After Trump’s first 100 days in office, the tariff policy’s modest revenue returns and deleterious effects on manufacturing highlight a tension between campaign promises and economic realities. While the administration may continue to make changes to tariffs, especially after the 90-day pause ends, the uncertainty surrounding this will only cause more hardship and risk further straining long-standing economic relationships.
It is time to put these tariffs to bed. We do not get rich by pushing away friends and customers. We need to be tearing down barriers to trade, not erecting new ones. Rather than continue to pursue a failed policy, Trump should focus on what actually works and what he promised during his address to Congress: cutting onerous regulations and lowering taxes to help improve the immediate landscape, and education reform to foster the next generation of leaders.
David Hebert, Ph.D., is a senior research fellow at the American Institute for Economic Research. He has worked with the Senate Budget Committee and the Joint Economic Committee.