Big revenue, trade leverage, and industrial perks: Why Trump’s $264B tariff haul will be hard to give up

WASHINGTON, D.C. — “‘Tariffs’ is the most beautiful word to me in the dictionary,” President Donald Trump liked to say early last year, calling it his favourite word and promising they would help usher in a new “golden age” for America.

He was serious. 

His administration has imposed tariffs against nearly every other country in the world, either through baseline duties, stacked “reciprocal” charges, product-specific tariffs, or national‑security measures related to fentanyl trafficking imposed under the International Emergency Economic Powers Act.

In response, world leaders have negotiated to retain access to the U.S. market. Some have seen tariffs eased or exempted — sometimes in return for concessions — but the U.S. government has collected billions in new tariff revenue. Meanwhile, prices have risen in many sectors, and U.S. allies – especially Canada and Mexico — are worried about their export-dependent economies.

Now, American politicians face a judgment day of sorts: this autumn’s midterm elections. Democrats are campaigning against the tariffs as a “tax on American families,” and Republicans are preparing to defend Trump’s duties in a bid to retain control of Congress. So, with just 10 months to go before their ballot-box reckoning, what wins can Trump Republicans — who have touted tariffs for putting “America First” to shield domestic industries, reduce the U.S. trade deficit, and boost manufacturing jobs — point to in terms of results?

Trump’s tariffs, according to the U.S. Treasury, generated a whopping $264 billion in revenue last year, compared to just $79 billion in 2024.

One of the White House’s key mechanisms for raking in these funds, the IEEPA, remains in doubt, given that most trade experts expect the U.S. Supreme Court to rule against Trump’s use of it in the coming weeks.

Still, Thomas Duesterberg, a trade expert and senior fellow at the Washington-based Hudson Institute, referred to the billions in the coffers as “substantial.” 

Trump has promised to use the revenue in many different ways, and the CATO Institute has tracked some of those pledges . A recent Washington Post analysis showed these amounts totalled nearly US$6 trillion, over 22 times 2025’s revenue. So the White House has already found more than enough ways to spend the cash it received from tariffs.

Inu Manak, senior fellow for international trade at the Council on Foreign Relations, said she expects much of the money to be used for bailouts – especially for farmers. 

“At the end of the day, I think [Trump’s] going to have to use that to pay off those he’s hurt from his trade wars,” she said, noting how the president did the same thing during his first term. Manak pointed to Trump’s earlier use of the Section 301 tariffs against China and how 90 per cent of the money generated was used to pay off U.S. farmers. 

American soybean farmers saw their Chinese orders plummet last year as a result of the trade war, and the gutting of demand has depressed prices.

But rebalancing trade with places like China is part of the bigger picture.

In fact, Duesterberg said he believes pushing back against China is more important to the White House than the revenue.

“I think the idea of rebalancing trade is at the forefront of what Trump could claim, if these things stay in place, by the time of the midterms,” he said, pointing to the significantly increased tariffs against China.

Whatever the Supreme Court decides on IEEPA, Duesterberg said, “Trump’s not gonna give up on this idea of rebalancing.”

The administration wants to address product deficits it says hurt U.S. growth and benefit non-market-economy powers like China.

While the trade deficit isn’t solely reliant on tariff levels, the U.S. trade deficit has dropped sharply. In October, it was at its lowest level since 2009.

Duesterberg described how the U.S. needs its allies pulling the same wagon.

“If we can keep the market-oriented democracies working together,” Duesterberg said, “it’s good for the United States, and it’s good for our friends as well.” 

Tariffs have also helped to keep allies onside, and foes in line, through economic coercion.

Trump has threatened to use tariffs over everything from ads featuring Ronald Reagan to support for Greenland’s sovereignty. In many cases, the fear of Washington following through has brought people to the negotiation table.

“I think in some cases, the tariff threats have definitely worked,” said Manak. 

“If you look at the whole issue over Greenland in the last two weeks, those threats really got European partners to the table, and they found a way to negotiate something with Trump.”

But she also suggested that European leaders have been perhaps too easily swayed by the threats. 

“Where countries have sort of brushed off his threats and waited a couple of days – tends not to have much of an impact,” Manak said, noting that China and, lately, Canada have been better about taking a measured approach. But has any of this helped boost domestic industries? 

Despite promises that tariffs would lead to reshoring in the U.S. and bolstered supply chain resilience, the jury is still out on the industrial impact.

Tariffs have led to some companies promising to invest and build in the United States, but the trouble with these overtures is that they take time — and the U.S. may not see anything built before Trump leaves office.

Duesterberg also points to gains in supply-chain resilience, especially in rare earths and pharma, noting that tariffs have reduced U.S. reliance on China-dominated imports in these critical sectors.

Clark Packard, a research fellow in CATO’s Herbert A. Stiefel Center for Trade Policy Studies, is more skeptical.

“Ultimately, their argument is that by erecting trade barriers around the United States, because the U.S. is such a large consumer economy, you will force foreign countries and companies, and foreign nationals to invest in the United States to sort of bypass the tariff wall.”

“I have very legitimate questions about how much of that investment will come to fruition,” he warned, pointing to the long timelines for such projects.

The public won’t wait, Packard warned: “I don’t think the American public is known for having patience when the economy is struggling.”

Andrew Hale, a fellow at Washington-based Advancing American Freedom, said he sees “no wins” from Trump’s tariffs. He acknowledges that Trump’s slashing of EPA rules and Biden-era mandates has led to much-needed deregulation, particularly for the energy sector, but tariffs have hurt manufacturing and employment. 

“Manufacturing has been in decline,” he said. “We have lost over 86,000 manufacturing jobs as well as a lot of mining jobs.” 

U.S. manufacturing jobs have been in decline for a few years. Still, Trump took office with promises of reversing that, and instead of an uptick, the country saw declines – drops that accelerated with his introduction of the “Liberation Day” tariffs. The December 2025 ISM Manufacturing Purchasing Manager’s Index dropped to 47.9 per cent, its lowest reading of the year, reflecting 10 straight months of contraction.

While Duesterberg said he sees tariffs as pragmatic tools for rebalancing trade and pushing back against China, all of the experts pointed to production shortfalls and ally risks.

“If the U.S. can be so difficult and abuse our allies …,” Hale said, “China’s saying they’re open for business.”

While Americans are notorious for ignoring foreign affairs on Election Day, they often vote based on pocketbook issues, so views on unemployment and inflation will matter. 

As a result, rather than being a boon for Republicans in the midterms, Hale predicts that tariffs will lead to continued declines in manufacturing and Republican losses. 

“This tariff war is not what a lot of these people voted for,” Hale said. “Americans cannot understand why we’re in this tariff war with Canada … This will have electoral effects on Trump.”

National Post

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