Trump's Tariffs and the Revenue Collected: Don't Let It Blind You from Looking at a Broader Picture of How the American Economy is Being Affected

American Eclectic posts articles twice a month, on the 1st and 15th. This is the fourth year of publication; previously published articles can be found on my site.

October 1, 2025

Bill Maher, a comedian on HBO (Real Time), said regarding Trump’s tariffs, “I will always call it as I see it.” This was about him early in Trump’s second term, saying that Trump’s tariffs would be bad for the American economy. Maher continued:

[L]ook, the stock market is at record highs. I know not everybody lives by the stock market, but I also drive around. I don’t see a country in a depression at all. I see people out there just living their lives.

And he further added:

And I would’ve thought, and I gotta own it, that these tariffs were going to f***ing sink this economy by this time, and they didn’t! So how do we deal with that fact, cause that’s the fact?

It seemed inevitable that the Washington Examiner (as seen in the above quote from one of their articles) and Fox News would highlight Maher’s statements. In a Fox News piece, Maher is quoted as saying:

Just to take an example, tariffs. Now I remember that I, along with probably most people, was saying at the beginning, ‘Oh, you know, by the 4th of July… the economy was going to be tanked by then,’ and I was kind of like, ‘Well, that seems right to me.

Well, Maher is on entertainment television, so any deep thinking is not necessarily expected. I find it hard to believe that serious political and policy analysts thought the American economy would face severe problems just six or seven months into Trump’s second term. Anything takes time to develop. One study that examined policy analysis stated:

Policy implementation is a complex process that involves a range of actors and factors. One of the most critical factors that can impact the effectiveness of policy implementation is time. The time factor refers to the duration between the adoption of a policy and its implementation, which can vary depending on several factors, such as political and bureaucratic processes, resource availability, and stakeholder engagement. Understanding the time factor in policy implementation is essential to ensure that policies achieve their intended goals and meet the needs of the target population.

Of course, if Maher spoke like this on television, it would not be entertaining. A quick mea culpa, and we move on. Another report that looked broadly at policies and their impact stated:

Monitoring implementation of policies aims at checking the progress of planned outputs of the policy, while evaluating impact of a policy is assessing the larger outcomes, goals and results of the policy.

Think about the two quotes I gave above, and neither is what anyone would say on television. But there is a great deal of truth in both statements. Maher decided to opt for the quick and superficial. He works in entertainment and said something toward the beginning of Trump’s term that he expected Trump to crash and burn, which fit an audience-pleasing moment. The Washington Examiner and Fox News saw value in doing pieces on him; both could help Trump, and that trumped any serious pieces.

I did television news in St. Louis for years, and I would never say something as academic as the two quotes above. At the same time, I never recall needing to be as entertaining as Maher, although that is his bread and butter. However, being dry and not quick to summarize in my television appearances allowed me to avoid making rash statements about policies.

Trump is using the collected tariff revenue to create the illusion that Americans will see money flowing their way—and more broadly, using it to suggest how well the country is doing because of his policies. Will Trump, a year from now, still be talking about giving back money to Americans? As Trump stated:

There could be a distribution or a dividend to the people of our country, I would say for people that would be middle income people and lower income people, we could do a dividend.

In July, revenue collected from tariffs was $152 billion, a notable increase from the $78 billion collected at the same time the previous year. Trump talks of wanting the revenue collected from tariffs to (someday) replace the income tax. I addressed this issue in an earlier article (This “New Golden Era” Coming Back to Americans: The Windfall of Fantasy and Imagination in Trump America).

Trump’s approach to tariffs has been chaotic, with an on-again, off-again approach, which makes it challenging to figure out where we are headed. But the assumption that only good things lie ahead for American businesses and consumers makes no sense. Trump added to the only-good-things-will-come-from-tariffs thinking by posting in August on his site, Truth Social:

Trillions of dollars are being taken in on tariffs, not caused inflation, or any other problems for America, other than massive amounts of CASH pouring into our Treasury’s coffers.

Trillions have not been collected, but by the end of June, it was closer to $94 billion (January-June). Furthermore, the most significant portion of tariff revenue collected has come from consumer goods (there are other categories, such as capital goods and raw materials). Assuming that tariffs drive up the price of foreign-made goods, and American consumers shift to buying domestic-made goods, then, in time, this category of tariff revenue collected should go down. Whatever fantasy thinking Trump has about how much, over time, we will collect in tariff revenues may not happen if Americans feel they need to significantly cut back on buying foreign-made goods.

One Federal Reserve System study estimated that high tariffs could lead to a 2 percent reduction in GDP, resulting in a slowdown in our economic growth. Some of this slowdown can be attributed to a decrease in the U.S. trade deficit. While this can be seen as a positive development, it also reduces the amount of tariff revenue that can be collected. Put aside Trump’s fantasies about all the money that will be flowing into the country from tariff revenues. We are only in the first few months of Trump’s second term, so where will the American economy be 18 or 24 months from now?

A Forbes article discussed the impact of Trump’s tariffs and included remarks by different corporate CEO’s. One quote in this article should be considered:

[K]eep in mind why [what these executives have to say is] important. It’s easy for many people to shrug off the financial pain of a big corporation. Remember, though, that the impacts spread. It could mean employees will lose jobs, the economy weakens, share prices drop, and, ultimately, retirement accounts feel negative effects.

A shoe company CEO stated—and I quote it the way it is in the article, to provide insight that assessing policies, any policies, are complicated, and often the language used reflects that. This CEO stated:

In terms of the gross margin pressure from tariffs, again, we articulated that was about 230 basis points. That's not the gross. That's the net after we got the supplier discounts for Q2.

Reduce the complicated to plain language, and the bottom line is that he expects Trump’s tariffs to cut company profits significantly. That is not a good thing, and Maher’s apology fails to address what is to come. Unfortunately, Maher’s theatrical statements get the attention.

A decline in profits can negatively impact the company’s stock price. Multiply that by many companies, and the stock market will react. In 2022, people with 401(k) plans lost $1.4 trillion in just six months. The COVID pandemic had a profound impact on many aspects of American life. If you rely on your retirement portfolio for financial support beyond Social Security, as one financial analyst stated, “people who use their retirement money to support themselves really suffer in this kind of event."

There is a relationship between the stock market and the country’s economic growth. The stock market rises, and people feel they have more money—a sentiment that influences consumer spending. When the stock market declines, consumer spending can be impacted. An analysis by Goldman Sachs stated:

For the stock market, every five-percentage-point increase in the US tariff rate is estimated to reduce S&P 500 earnings per share by roughly 1-2%.

…During Trump’s last presidency, the S&P 500 fell by a cumulative total of 5% on days when the US announced tariffs in 2018 and 2019, according to Goldman Sachs Research. It fell by slightly more, a total of 7%, on days when other countries announced retaliatory tariffs.

Weigh the loss in your portfolio against the revenue gains from tariff increases, and this is one way that those revenue increases begin to look questionable. Trump may propose giving money back to some Americans or eliminating the income tax, assuming revenue from tariffs can replace those taxes, which helps him with television sound bites and garners immediate support from people who hear him and believe what he says. However, his statements should be viewed with skepticism, especially when he is just a politician making promises to garner support. Too many people see Trump as somehow different than more traditional politicians, but he knows how to play the same game.

I am not sure where we are headed, and I suspect that is the case with many analysts trying to figure out how American companies will perform in a hostile foreign trade market. Consider a tit-for-tat approach regarding Trump's tariff increases; countries will respond in different ways. Companies in the S&P 500, on average, generate 41 percent of their total sales from international sales. Moderna generates 70 percent of its revenue from international sales.

Quarterly reports on company earnings provide insight into the direction the stock market is heading. The way to think about these reports is not about how a company performed over the previous three months, but what these reports might reveal about future earnings and the company’s stability, or lack thereof, as it looks toward its future. I think it is too early to say much, but a year from now, what will many different company reports indicate if foreign sales run into strong headwinds from countries responding to Trump’s tariffs? If we begin to notice that a number of these companies are in the S&P 500, what will that signal about the stock market?

One report on the stock market in the current Trump term stated:

The market reaction to Trump’s second term has been much different from his first. Instead of rallying, the S&P 500 has dropped over 10% from its highs, entering correction territory. The uncertainty surrounding Trump’s trade proposals, along with escalating tariffs on imports and exports, has rattled investors. Loans, credit cards, and money market rates are also under pressure, with rising borrowing costs creating additional concerns. While some industries, like defense and fossil fuels, may benefit from Trump’s policies, the broader market is struggling to find its footing. Traders need to be extra cautious, as volatility is not just expected—it’s already here.

In considering what I see coming, I thought in terms of the economies of different states, rather than the American economy as a whole. A Republican congressman from Nebraska said in August:

We're now in a troubled time. …And honestly, in Nebraska, the GDP here has decreased by 6 percent over the last year. And it's all about trade. It's all about getting corn and soybeans out the door.

And he added:

What we're seeing is basically a recession economy in Nebraska and Iowa right now.

Corn is a significant export crop for Nebraska, generating $8 billion for the state’s economy. Canada, Mexico, and China are major trading partners, and Trump’s tariffs are harming their economies. One Nebraska farmer wrote, “Tariffs can have a purpose. But the way they’re being used right now doesn’t match what voters asked for.”

The director of a research center on international trade and finance in Nebraska indicated that uncertainty about the future is there in spades:

This is the biggest tariff action of our lifetime. …It is such a shift from the posture of the U.S. for decades in leading the building of a system of rules for trade that did provide certainty and predictability for producers that do engage in trade.

Retaliation by the countries affected by Trump’s tariffs is expected to do severe harm. Looking solely at the increased revenue from tariffs collected overlooks this consideration.

The agriculture sector, as one analyst stated, is a “natural target” in a trade war. What stood out from reading this particular analyst’s statement was that, like the research director quoted above, both are struggling with the uncertainty of what lies ahead. In some ways, while Trump pushed tariffs in his first term, this time around, the situation seems filled with a greater amount of uncertainty, so much for Maher’s apology.

Agriculture has experienced growing uncertainty since Trump’s first term, and his second-term trade policies are only exacerbating the uncertainty. Trump’s trade war with China, which began during his first term, continues into the current term. The pandemic has impacted global food supplies, and the Ukraine War has exacerbated these issues. One study noted that in looking at agriculture, the focus should not just be on produce, but broader than that:

[I]t won’t just be farmers who are affected: the industry supports a vast array of seed, fertilizer, and crop protection companies and distributors; machinery makers; and logistics and transport providers, as well as the food companies and retailers who make and sell the world’s food.

Kentucky is another state that is already starting to feel the effects of Trump’s trade war, but not with agriculture, but with bourbon and other products. First, it is essential to emphasize that, in addition to the issue of Trump’s tariffs and their impact on Kentucky’s bourbon sales, the industry is also being affected by a shift in customer drinking preferences. Overall, whiskey sales nationally fell just under 2 percent in 2024. Americans under 35 appear to be drinking less alcohol than was the case two decades ago. What Trump’s tariffs are doing is adding to the problems.

The President of the Kentucky Distillers’ Association stated:

Bourbon continues to drive Kentucky’s economy as our homegrown industry is generating more jobs, more payroll, more tax revenue, more tourists and more distilleries in more counties than ever before. But we are up against a triple threat of back-breaking tariffs, snowballing taxes and shifts in consumer trends that have slowed sales. If tariffs targeting American Whiskey are levied, distillery workers, farmers, truckers, coopers, hospitality staff and entire industries that depend on Bourbon will suffer.

One distiller saw the issue as a “trifecta” where the change in drinking preferences coincided with an oversupply of whiskey, and then Trump’s tariffs were added to the mix. Brough Brothers Distillery in Louisville saw Trump’s tariffs as essentially bringing their discussions on selling their product in Canada to a halt. Brough Brothers is the only black owned distillery in Kentucky. Beyond just bourbon, Canada is Kentucky’s most significant export partner. Aerospace products are the state’s largest export item, but because Kentucky is associated with bourbon, the attention is on that particular whiskey. In the case of exports, 16.3 percent of the state’s gross domestic product (GDP) is derived from exports. Only Louisiana and Texas have a greater percentage of their states’ GDP coming from exports.

Kentucky also has almost a third of its GDP coming from imports, primarily from Mexico, Japan, and Taiwan (first among all states). Michigan is second with approximately a quarter of its GDP coming from imports. Tariffs will (and are already starting to) drive up the prices Americans pay for imported goods. Since Kentucky’s customer spending is closely tied to import buying, the state’s residents may feel the impact of higher prices on imported items more acutely than residents of other states.

Because Kentucky is more deeply integrated into the global economy than many other states, many jobs in the state are directly or indirectly linked to global exports and imports, placing it in a more precarious position regarding its labor market. Trump’s tariff policies might matter to job growth (or layoffs) in the state.

The President of the Kentucky Chamber of Commerce stated:

I can say with pretty much certainty that there would be layoffs. We don't know exactly how it will impact every single business, but when businesses are hit that hard with that high of a tariff, we are likely to see a dip in the economy. And of course, that would result in potential job loss.

Furthermore, he added that because the price of imports is expected to increase, Kentucky residents might end up spending up to $1,200 more per year on everything they buy. That implies that switching from imported goods to domestic equivalent goods will not be all that easy to do.

Two different states, Nebraska and Kentucky, two different economies. Getting beyond the superficial glare of the increased revenue collected from Trump’s tariffs presents a picture of an American economy that may struggle as it figures out how to adapt to a trade war intended to benefit the American people. Considering the prospects for companies on the S&P 500 and foreign trade, being optimistic about the future is difficult. I do not expect Bill Maher to delve into the details of what is to come; nothing entertaining here. Maher’s statement about driving around the country and seeing people just living their lives may sound nice, but lives are starting to be affected in ways that may be difficult to ignore.

NOTES

Mason Brighton, “Business experts discuss tariff impacts on Kentucky,” Spectrum News 1 (February 3, 2025): https://spectrumnews1.com/ky/louisville/news/2025/02/03/business-experts-discuss-tariff-impacts-on-kentucky

Hugh Cameron, “Republican says state’s GDP has plunged 6% due to trade war-’Troubled time.’” MSN (August 5, 2025): https://www.msn.com/en-us/money/markets/republican-says-state-s-gdp-has-plunged-6-due-to-trade-war-troubled-time/ar-AA1JW2UL?ocid=msedgntp&pc=U531&cvid=fd225f525fd54e6191edfe00b526416f&ei=10

Evaluate policy impact, Data to Policy Navigator (no date): https://www.datatopolicy.org/navigator/evaluate-policy-impact

Nadia Evangelou, “Which States Rely Most on Exports and Imports? A Closer Look at the Numbers Behind Trade,” Economists’ Outlook (April 14, 2025): https://www.nar.realtor/blogs/economists-outlook/which-states-rely-most-on-exports-and-imports-a-closer-look-at-the-numbers-behind-trade

Brian Flood, “Bill Maher admits he was wrong about Trump on tariffs, doesn’t ‘see a country in a depression at all.’” FOX News (July 28, 2025): https://www.foxnews.com/media/bill-maher-admits-he-wrong-about-trump-tariffs-doesnt-see-country-depression-all

How Does Trump Affect the Stock Market? A Breakdown of Market Moves, stockstotrade (June 5, 2025): https://stockstotrade.com/how-does-trump-affect-the-stock-market/

How tariffs are forecast to affect US stocks, Goldman Sachs (February 7, 2025): https://www.goldmansachs.com/insights/articles/how-tariffs-are-forecast-to-affect-us-stocks

Gary Clyde Hufbauer and Ye Zhang, “Trump’s tariff revenue tracker: How much is the US collecting? Which imports are hit? PIIE Peterson Institute For International Economics (August 7, 2025): https://www.piie.com/research/piie-charts/2025/trumps-tariff-revenue-tracker-how-much-us-collecting-which-imports-are

Sharon Jeon, Ricardo Reyes-Heroles, Abhi Uppal, Eva Van Leemput, and David Yu, “Trade-offs of Higher U.S. Tariffs: GDP, Revenues, and the Trade Deficit,” FEDS Notes, Board of Governors of the Federal Reserve Board (July 7, 2025): https://www.federalreserve.gov/econres/notes/feds-notes/trade-offs-of-higher-u-s-tariffs-gdp-revenues-and-the-trade-deficit-20250707.html

“Kentucky bourbon maker says Trump tariffs immediately impact his business,” CBS News, YouTube: https://www.bing.com/videos/riverview/relatedvideo?q=Kentucky’s+%249B+whiskey+industry+in+crisis+as+Gen+Z+drinkers+shun+bourbon%2c+tariffs+take+toll&&mid=9022E77B00CDB8DD20479022E77B00CDB8DD2047&FORM=VAMGZC

Paulina Likos, “How Earnings Affect Stock Prices,” U.S. News & World Report (October 15, 2021): https://money.usnews.com/investing/investing-101/articles/how-earnings-affect-stock-prices

Walker Luedtke, “Tariffs harming farms, businesses and budgets,” Nebraska Examiner (April 19, 2025): https://nebraskaexaminer.com/2025/04/19/tariffs-harming-farms-businesses-and-budgets/

Irina Ivanova, “Stock market’s fall has wiped out $3 trillion in retirement savings this year,” CBS News (June 17, 2022): https://www.cbsnews.com/news/stocks-drop-recession-retirement-savings-401k-ira-3-trillion-2022/

“Mixed Forecast For Kentucky Bourbon Industry In 2025,” The Whiskey Reviewer (August 5, 2025): https://whiskeyreviewer.com/2024/12/mixed-forecast-for-kentucky-bourbon-industry-in-2025/

Asher Notheis, “Bill Maher ‘wrong’ about Trump’s tariffs: ‘I gotta own it,’” Washington Examiner (July 28, 2025):https://www.msn.com/en-us/politics/government/bill-maher-wrong-about-trump-s-tariffs-i-gotta-own-it/ar-AA1JrQeC?ocid=BingNewsSerp

Dorothy Neufeld, “How Much Does Corporate America Depend on Foreign Revenue?” Visual Capitalist (September 10, 2024): https://www.visualcapitalist.com/how-much-do-companies-depend-on-foreign-revenue/

Noah Rohlfing, “Ag Economist Explains Why U.S. Farmers Are Caught in Crossfire of Tariff Uncertainty,” SF SuccessfulFarming (April 17, 2025): https://www.agriculture.com/iowa-state-economist-explains-tariff-uncertainty-with-key-ag-trade-partners-and-what-to-watch-in-coming-months-11716357

Ty Roush, “Trump Says His Tariffs Collected ‘Trillions’ In Revenue So Far-Here’s The Real Figure,” msn (August 12, 2025): https://www.msn.com/en-us/money/economy/trump-says-his-tariffs-collected-trillions-in-revenue-so-far-here-s-the-real-figure/ar-AA1KoVft?ocid=BingNewsSerp

Erik Sherman, “Here Are Some Of The Early Big Signs Of Tariff Impacts,” Forbes (August 3, 2025): https://www.forbes.com/sites/eriksherman/2025/08/03/here-are-some-of-the-early-big-signs-of-tariff-impacts/

The Time Factor: Implementation Lag and Policy Effectiveness, FasterCapital (April 3, 2025): https://fastercapital.com/content/The-Time-Factor--Implementation-Lag-and-Policy-Effectiveness.html#Introduction-to-the-Time-Factor-in-Policy-Implementation

Matt Westerlund, Adam Haidermota, Lucas Moino, Iacob Koch-Weser, “How Tariffs Could Reshape Global Agriculture,” BCG Boston Consulting Group (2025): https://www.bcg.com/publications/2025/how-tariffs-could-reshape-global-agriculture

Steve White, “Experts warn of long-term impacts on Nebraska as tariffs could have far ranging effects,” NTV (April 7, 2025): https://nebraska.tv/news/local/experts-warn-of-long-term-impacts-on-nebraska-as-tariffs-could-have-far-ranging-effects

Ariel Zilber, “Kentucky’s $9B whiskey industry in crisis as Gen Z drinkers shun bourbon, tariffs take toll,” New York Post (August 5, 2025): https://nypost.com/2025/08/05/business/kentuckys-9b-whiskey-industry-in-crisis-as-gen-z-drinkers-shun-bourbon-tariffs-take-toll/

CHECK

https://www.cbo.gov/publication/61697