President Trump has intensified his global trade offensive this week, confident that the import tariffs will bring manufacturing jobs and stronger economic growth to the U.S., while easing concerns about inflation.
As of Monday, more than $98 billion in tariff revenue has been collected by the federal government, according to the latest Treasury Department data—a 110.5% increase compared to the same period last year.
Treasury Secretary Scott Bessent stated this week that tariff revenue could surpass $300 billion by year-end. If accurate, this would far exceed the $200 billion estimate projected by the Committee for a Responsible Federal Budget, Moody’s economists, and others. Meanwhile, companies have not fully passed these tariff costs onto consumers as expected, helping to keep inflation in check, the Washington Times reported.
The Consumer Price Index, a key gauge of inflation, slowed in May compared to the previous month, according to the Labor Department’s latest data. Prices for a broad category of goods, excluding food and energy, increased by just 0.1% for the month, bringing the annual inflation rate down to 2.4%. This is a drop from 3.3% in May 2024.
Economist Alex Salter of Texas Tech University said the inflationary impact of the tariffs was always exaggerated. “When you tax something, the price of it goes up, but imports are only about 15% of the U.S. economy, so when you raise the average tariff rate, that is really not enough to drive sustained dollar depreciation,” he said.
“I think at most you would get a one-time price increase for the affected goods, but the overall inflationary consequences are going to be pretty small, like a blip,” he told the Times.
Additionally, the cost of exporting goods to the U.S. fell by 0.9% in May, according to the Bureau of Labor Statistics. This marks the largest decline since October 2023 and significantly exceeds Wall Street’s expectation of a 0.2% decrease.
The drop was largely driven by a sharp fall in automobile export prices. For instance, the price of Japanese vehicles shipped to North America dropped 17.7% between March and May, according to the Bank of Japan.
China, which faced the brunt of the additional tariffs, has also reduced export prices to the U.S., with prices of Chinese products falling approximately 2% across all industries from December to May, according to the Labor Department. In June, the U.S. and China began finalizing a trade deal, said the Times.