Trump Replacement Tariffs Leave $825B Revenue Gap
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- The Trump administration's replacement tariffs under Section 301 of the Trade Act of 1974 would raise about $105 billion a year, replacing only ~60% of the revenue lost when the Supreme Court struck down the IEEPA emergency regime in February, per the Committee for a Responsible Federal Budget.
- CRFB projects that Trump's latest tariff package — including new duties on dozens of trading partners that took effect overnight, plus duties on Brazil and proposed tariffs on Canada — would generate roughly $950 billion through 2036, versus $1.7 trillion from the broader emergency tariffs.
- That leaves a revenue gap of approximately $825 billion through 2036, assuming the new tariffs survive legal challenges and remain in place.
- The replacement tariffs carry lower rates and include more carveouts than the IEEPA regime — notably excluding energy products to limit overlap with the inflationary effects of the Iran-related oil shock.
- The White House rejected the framing that the new tariffs were designed to replace the struck-down duties; a senior official said the timing was meant to provide continuity and predictability for businesses as temporary tariffs expired.
- In June, net customs receipts fell to negative $25.6 billion as refund checks to importers outpaced new tariff collections, reflecting the ongoing unwind of the old regime.
Why it matters: An $825 billion revenue shortfall through 2036 forces the Treasury to find replacement funding or accept wider deficits, while the deliberate energy carveout signals the administration is actively shielding consumers from compounding inflation as the Iran oil shock drives prices higher — a constraint the original IEEPA tariffs did not face.
