Donald Trump the Megathread part II - Mod Warning updated in OP 12/2/26

There's a bit more to it than that.

Thank about it. To the extent that the tariff works to create more domestic output, the government gets no revenue. If I buy the US-made widget instead of the Taiwanese-made widget, no tariff is paid by anybody, so there's no tariff revenue.

Conversely, to the extent that the government gets tariff revenue, the tariff hasn't acheived the stated policy goal of promoting domestic output — if the government is getting tariff revenue, I must be importing the Taiwanese widget so the US widget producer still has men and machines standing around idle, not producing the widget that I'm consuming and not getting paid for it.

So, the more Trump boasts about the tariff revenues raised, the more he is conceding that the tariff policy hasn't promoted domestic output; it has just raised domestic prices.

This does have an inflationary effect and, as Wolf3589f points out, because tariffs are levied further up the supply chain than sales tax is, it's a bigger inflationary effect than is produced when a similar amount of sales tax is collected. The extra costs that the purchasers of tariffed products pay only partly accrue to the US government; a non-trivial chunk of them goes to various people in the supply chain.

So, going back to the claim originally made by everlast75. . .

the US didn't take in billions in tarrifs

. . . how true is this? It depends on whether you think "the US" here means the US goverment, or the country as a whole. The government took in a bunch of tariff revenues, but the country as a whole did not. So far as the country is concerned, all that happened was that the government collected more taxes from the people, but did so in an ineffcient way that burdened US businesses and raised US inflation in ways that would have been avoided if the same amount of tax revenue were raised more efficiently.

If the USG collects it from an entity, it's a tax. Tariffs are taxes, plain and simple.

Obiously it does impact prices further down the supply chain; I don't think Aloysius is suggesting otherwise. But it does matter than it's the US importer who's actually liable to pay, for two reasons.

First, it puts the kibosh on Trumpy claims that this tax is paid by foreign exporters.

Secondly, because the tax is collected, not at the point of retail sale but much earlier in the supply chain, there's a cascading effect which maximises its inflationary impact. Consider:

10% sales tax imposed at the point of retail sale — retail price goes up by 10%, all of which goes to the public coffers. So a $100 widget now costs $110, and the state gets the exra $10.

10% tariff imposed at the point of import - cost to importer goes up by by 10%. So the importer now pays $110 for the widget that, last week, he could get for $100.

The importer sells to a national distributor. His margin is, lets say, 20%, so last week he on-sold the widget for $120. You think he'll on-sell now for $130? No, he won't. His margin is 20%; he on-sells for $132. If he on-sells for less than that, his profit margin is falling; his return on capital is falling; his share price will fall. To buy the widget he now has to lay out more capital, and he needs to earn a return on that additional capital.

And the same again when the distributor sell to the regional wholesaler, whose margin in also 20%. The regional wholesaler will sell to the retailer for %158.40, who will add his own 20% and sell to the consumer for $190.08.

The consumer ends up paying not just the $10 tariff, but an margin to every intermediary in the supply chain to maintain their return on capital. I'll spare you the full calculations, but in this example the retail price of the imported widget has risen from $172.80 to $190.08. The consumer pays an extra $17.28, of which the government gets just $10.

The actual figures in any case will vary depending on how long the supply chain is and how much margin each business takes along the way, but the result is always the same — the extra amount the consumer has to pay is greater than the amount that the government receives.

In the north of England trump means 'fart'. This amuses me.

There are trillions in the US Government's accounts (at least in theory) but that does not put food on a table for those furthest removed from those bank accounts.

Its hard to see what point you are making, we all know the money has been circulated into government accounts from the public's wallets, you seem to be suggesting that because the government has it, that's ok?