Fact Check: "Will tariffs make the United States rich?"
What We Know
The claim that tariffs will make the United States rich is a simplification of a complex economic issue. President Trump's tariff plan, as of April 2025, is projected to raise over $5.2 trillion in revenue over ten years on a conventional basis, and $4.5 trillion on a dynamic basis, which accounts for economic effects (source-1). However, this revenue comes at a cost. Tariffs are expected to reduce GDP and wages significantly, with estimates suggesting that all future households will be worse off due to these economic declines (source-1).
The average effective U.S. tariff rate is projected to rise to 22.5%, the highest since 1909, which is expected to lead to a short-term price increase of 2.3% across the economy. This translates to an average loss of $3,800 per household in 2024 (source-2). Furthermore, the tariffs are anticipated to reduce U.S. real GDP growth by 0.5 percentage points in 2025 and have long-term effects that could result in a smaller economy by 0.4% to 0.6% annually (source-2).
Analysis
While the projected revenue from tariffs may seem substantial, it is crucial to consider the broader economic implications. Tariffs act as a tax on imported goods, which can lead to increased prices for consumers and reduced demand for foreign products. This, in turn, can create a ripple effect that depresses overall economic activity (source-1).
The analysis from the Penn Wharton Budget Model indicates that the economic burden of tariffs is likely to fall primarily on consumers, leading to increased costs of living and reduced disposable income (source-1). Moreover, the increase in economic policy uncertainty due to tariff announcements can further depress investment and consumption decisions, exacerbating the negative economic impact (source-2).
Critically, while tariffs may generate revenue, they also lead to significant economic distortions. The revenue generated by tariffs is comparable to that which would be raised by increasing the corporate tax rate, yet tariffs have a more detrimental effect on GDP and wages (source-1). This suggests that the economic costs associated with tariffs outweigh the potential financial benefits.
Conclusion
Verdict: False. The claim that tariffs will make the United States rich oversimplifies the economic consequences of such policies. While tariffs may generate significant revenue, they also lead to increased consumer prices, reduced GDP, and lower wages, ultimately making households worse off. The negative economic impacts of tariffs far outweigh the potential benefits, indicating that they are not a viable path to increasing national wealth.
