"Tariff Revenue Is Addictive... Hard to Refuse"
"Even If Democrats Take Power, Withdrawing Tariffs Will Be Difficult"
The New York Times (NYT) reported on August 3 (local time) that President Donald Trump's tariff policy has brought significant revenue to the U.S. federal government, and that the deficit-ridden government may become reliant on this new source of income.
According to the NYT, U.S. tariff revenue, including some excise taxes, reached $152 billion (approximately 211 trillion won) from January to July this year, nearly double the $78 billion recorded during the same period last year.
Experts predicted that if President Trump's tariff policy is maintained, more than $2 trillion (about 2,780 trillion won) in additional tariff revenue could be generated over the next ten years. While many argue that tariffs should be withdrawn because they reduce economic efficiency and place a greater burden on low-income groups, some suggest that it may be difficult for the government to give up such a large source of revenue.
Joao Gomes, an economics professor at the Wharton School of the University of Pennsylvania, stated, "I think tariff revenue is addictive," adding, "In a situation where (the U.S. government) faces severe debt and deficits, it would be a very difficult decision to refuse a source of income." Ernie Tedeschi, director of economic research at the Yale Budget Institute, also observed that future U.S. leaders may hesitate to abolish tariffs if they judge that doing so would place a greater burden on the national debt.
There is also analysis that if the government tries to replace tariffs by raising other types of taxes, it would require cooperation from Congress, which could be politically burdensome for lawmakers. The NYT pointed out, "Some politicians are already considering how to use the new tariff revenue," and "Recently, President Trump even mentioned the possibility of refunding part of the tariff revenue to Americans." In fact, on July 29, Republican Senator Josh Hawley proposed a bill to provide at least $600 per person to all Americans to offset the burden of price increases caused by tariffs.
The NYT noted that even if the Democratic Party regains power, it may try to use tariff revenue to fund new social welfare programs. This is because maintaining existing tariffs would be a politically easier choice than attempting new tax increases.
However, there are also critical perspectives regarding the sustainability of the tariff policy. In the future, tariffs may become unpopular among consumers, and a future administration may attempt to lower tariffs in order to reduce prices. Additionally, if major global companies build production facilities in the United States as envisioned by President Trump, the very scope of goods subject to tariffs could decrease. Alex Zajczyk, policy director at the U.S. think tank Groundwork Collaborative, stated, "In the long term, simply securing tax revenue is unlikely to be a priority for the progressive camp."
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