AUDIE CORNISH, HOST:
Sixty-three billion dollars - that's how much the U.S. government has collected in tariffs in the last year. And with President Trump threatening new tariffs on China, that amount could go up. Josh Zumbrun of The Wall Street Journal joins us to talk about that.
Welcome to the program.
JOSH ZUMBRUN: Thanks so much for having me.
CORNISH: To begin, what does that $63 billion represent?
ZUMBRUN: Right - so you can think of the new tariffs and the old tariffs. The U.S. had a lot of tariffs that have been in place for decades. And those tariffs have brought in about $30- or $35 billion a year. And these are the amounts that U.S. importers have to pay on the goods that they're importing from all around the world. Then there's also about $27 billion that have come in from the new tariffs imposed by the Trump administration. And so it's when you put together those old tariffs and the new tariffs that you get to a figure that's as big as 63 billion.
CORNISH: That's the total amount. But how much of it is coming from the China tariff specifically?
ZUMBRUN: So a really interesting thing is that in June, for the first time, more than half of the tariff revenue that came into the U.S. was coming from those things imported from China.
CORNISH: And to be clear, it's not that China is paying these tariffs, right? It's whoever is importing the goods. I feel like we have to clarify each time we talk about this story.
ZUMBRUN: That's exactly right. This is goods that come from China, but it's the U.S. importer that technically has assessed them. The president is sometimes a little vague or sometimes kind of downright misleading when he talks about this, but it actually is U.S. importers that are - assess this bill when they bring things in at the border, at the ports.
CORNISH: A doubling in tariff revenue - where's that money going?
ZUMBRUN: Well, it hasn't been much of a windfall, and the main reason for that is that the trade war has taken such a big toll on U.S. farmers that the administration has rolled out two separate rescue programs kind of for the farm economy. These have been programs where farmers receive big, direct payments to make up for all their lost sales for China. And as it happens, those programs have been about $28 billion. So you've gotten $27 billion in new tariff money, but you've spent about 28 billion to help farmers out during this conflict. And so if you think of it that way, the net effect has been actually very slightly negative.
CORNISH: I'm sure those farmers would rather just make those sales, right?
ZUMBRUN: The program hasn't been very popular with the farmers. They would much prefer to just have more successful markets that they can go to rather than have to kind of accept government handouts.
CORNISH: President Trump tweeted earlier this year that with more than a hundred billion coming into the U.S. in tariffs, the U.S. would buy agricultural products from farmers, ship them to poor and starving countries in the form of humanitarian assistance. Has that happened?
ZUMBRUN: No. They looked into a program along those lines but realized it was pretty infeasible. You know, there's problems with kind of dumping large amounts of crops on poor countries because you can ruin their own agriculture sectors. So they decided to just do the more simple program, where you provide the direct payments to farmers. Now, the part that is right there is that the total amount being brought in by these could get to be $100 billion. I mean, at the current pace - it was 6 billion in June. That would work out to about 72 billion a year if it continues. And there's talk of adding even more tariffs on top of that. So you really could get to 100 billion being the number.
CORNISH: But at the end of the day, this has not turned into some kind of windfall for the U.S.
ZUMBRUN: No. I mean, even when you account for the extra revenue that's come in from the tariffs, the U.S. has still been running trillion-dollar deficits. So, you know, all this money that's coming in from tariffs is going right out the door, and the Treasury is still having to borrow a trillion dollars a year just to fund the kind of scale of government operations. Some people have written to me and said, oh, does this mean we're going to pay down the debt? And unfortunately, the answer is no, not even close.
CORNISH: That's Josh Zumbrun. He's the national economics correspondent for The Wall Street Journal.
Thanks so much.
ZUMBRUN: Thanks for having me.
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