Fact Check: USA will get rich from tariffs

The Claim: "USA will get rich from tariffs"

Introduction

The assertion that the United States will become wealthy as a result of tariffs is a contentious topic in economic discourse. Proponents argue that tariffs can protect domestic industries and generate government revenue, while critics contend that they may ultimately harm the economy by increasing consumer prices and provoking retaliatory measures from trading partners. This article will explore the available evidence regarding the economic implications of tariffs on the U.S. economy, examining both supporting and opposing viewpoints.

What We Know

Economic Impact of Tariffs: According to a report from the Economic Forecast Project, tariffs can have multifaceted effects on various economic stakeholders, including consumers, producers, and government revenue. The report emphasizes that while tariffs may protect certain industries, they can also lead to higher prices for consumers and retaliatory tariffs from other countries, which can negatively impact exports and overall economic growth 1.
GDP Effects: A recent analysis from Yale's Budget Lab indicates that newly enacted tariffs are expected to reduce the size of the U.S. economy in both the short and long term. Specifically, the April 2025 tariffs alone are projected to have a negative impact on real GDP 2.
Revenue Generation: The Tax Foundation estimates that the tariffs could increase federal tax revenue significantly, projecting nearly $2.9 trillion over the next decade from all tariffs combined. However, this projection does not account for the potential negative economic impacts that could arise from reduced trade and increased prices 7.
Consumer Impact: A report from the University of Chicago highlights that while tariffs can raise funds for the government, they primarily act as a tax on consumers, leading to increased prices for imported goods. This can disproportionately affect lower-income households who spend a larger portion of their income on goods subject to tariffs 5.
Historical Context: The Trump Administration's trade policies, particularly the imposition of tariffs on steel and aluminum, led to increased domestic production in some sectors but also sparked retaliatory tariffs that raised costs for downstream industries. This suggests that the benefits of tariffs may be offset by negative consequences in other areas of the economy 9.

Analysis

The claim that the U.S. will become wealthy from tariffs is supported by some sources that highlight potential revenue generation and protection for domestic industries. For instance, the Tax Foundation's projections of increased federal revenue could suggest a financial benefit from tariffs. However, the reliability of these projections is questionable, as they do not fully consider the broader economic implications, such as reduced consumer spending and potential job losses in industries reliant on imports.

Conversely, sources like the Yale Budget Lab and the Economic Forecast Project provide a more cautious perspective, emphasizing the negative impacts on GDP and consumer prices. The potential for retaliatory tariffs and trade wars, as seen in past U.S. trade policies, raises concerns about the long-term sustainability of relying on tariffs as a revenue source.

Moreover, several sources, including government reports, may have inherent biases. For example, reports from the White House may present a more favorable view of tariffs to align with political agendas, while independent economic analyses may offer a more balanced perspective but could also be influenced by their funding sources or institutional biases.

The methodology behind the economic projections is also critical. Many studies rely on models that make assumptions about consumer behavior, trade elasticity, and the global economic environment, which can vary significantly. A more comprehensive analysis that includes a wider range of economic scenarios would help clarify the potential impacts of tariffs.

Conclusion

Verdict: Mostly False

The claim that the U.S. will get rich from tariffs is "Mostly False" due to the mixed evidence surrounding the economic impacts of tariffs. While some projections suggest potential revenue generation, such as the Tax Foundation's estimate of nearly $2.9 trillion over the next decade, these figures do not adequately account for the broader negative consequences, including increased consumer prices and potential reductions in GDP. Reports from sources like the Yale Budget Lab indicate that tariffs may harm the economy in the long run, raising questions about the sustainability of relying on tariffs for wealth generation.

It is important to note that the economic effects of tariffs are complex and can vary significantly based on numerous factors, including consumer behavior and international trade relations. The evidence available is not definitive, and projections often rely on assumptions that may not hold true in all scenarios. Therefore, while there are arguments in favor of tariffs, the overall consensus leans towards skepticism regarding their ability to enrich the U.S. economy.

Readers are encouraged to critically evaluate information regarding tariffs and consider the multifaceted economic implications before drawing conclusions.