On the eve of the latest round of U.S.-China trade talks, President Donald Trump falsely claimed that the U.S. collects “over $100 Billion a year in Tariffs.” The U.S. collected $41 billion in fiscal year 2018, and has collected $34.7 billion through the first six months of this fiscal year.
The nonpartisan Congressional Budget Office projects that the U.S. will collect $74 billion in fiscal year 2019, and won’t reach $100 billion a year until 2027.
Trump made his claim about tariff revenue in a tweet on May 8 — a day before Chinese Vice Premier Liu He is expected to arrive in the U.S. for trade talks.
….Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier) are now coming to the U.S. to make a deal. We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers…great for U.S., not good for China!
— Donald J. Trump (@realDonaldTrump) May 8, 2019
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First, as he has been doing for years, Trump overstates the trade deficit with China. The total trade deficit in goods and services with China is nearly $379 billion in 2018. The U.S. had a deficit in goods of about $419 billion with China, but that was offset by a $40.5 billion trade surplus in services.
Now, Trump overstates the amount of revenue that the U.S. collects in tariffs, which are taxes paid by U.S. importers in the form of customs duties.
The U.S. collected $41.3 billion in customs duties in fiscal year 2018, according to the Treasury Department. In its summary of fiscal year 2018, the nonpartisan Congressional Budget Office said, “Customs duties rose by $7 billion (or 19 percent), in part because of new tariffs imposed by the [Trump] Administration during the year.”
As we have written, the Trump administration last year imposed tariffs on $250 billion worth of Chinese goods, and China responded with tariffs on $110 billion of U.S. goods. The two countries have been trying to negotiate a trade agreement ever since.
In his tweet, Trump said it remains to be seen what happens in the trade talks, but for now he is “very happy with over $100 Billion a year in Tariffs filling U.S. coffers.” However, even with the tariffs imposed by the Trump administration, the CBO projects revenues from customs duties to reach $74 billion this fiscal year and $79 billion in fiscal year 2020.
The CBO projection of $74 billion for the current fiscal year seems to be right on track. So far, the U.S. has collected $34.7 billion through the first six months of this fiscal year, according to the most recent monthly statement of revenues and outlays issued by the Treasury Department.
Here is a chart that shows customs duties revenue by year, based on actual revenue data from the White House Office of Management and Budget and estimated revenue data from the CBO.
As the chart illustrates, the tariffs imposed on Chinese goods by the Trump administration have increased revenue. That’s because tariffs on Chinese imports account for a disproportionate share of customs duties revenue.
The U.S. collected about $23 billion in tariffs on Chinese goods in calendar year 2018 — far more than any other country, according to the U.S. International Trade Commission DataWeb, which uses data from the U.S. Census Bureau. The amount collected on Vietnamese goods was the second highest, but it was less than $4 billion, according to USITC DataWeb.
Even so, the U.S. does not collect as much as the president claimed.
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