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How much additional money is the US government raising with its tariffs? Jay Shambaugh offers some useful perspective in “Tariffs are a particularly bad way to raise revenue” (Brookings Institutions, November 5, 2025).

This figure shows tariff revenues as a share of GDP in the US and the OECD countries (that is, mainly high-income countries) since 2005. As you can see, average pre-Trump tariff revenues for these countries were around 0.2% of GDP. The US level bumped up a bit in the first Trump administration, but since has skyrocketed: the final US data point is monthly data for August 2025.
 

Total US federal revenue in the last 50-60 years has been about 16-18% of GDP. Against that base, an increase of 1% of GDP is notable.

How does the new US level of tariffs rank internationally? Shambaugh offers this useful figure. The US level in 2022 and in August 2025 are shown in yellow. The green bars show higher income developed economies, while the blue bars show lower-income deveoping countries. Low-income countries tend to have higher tariff revenues as a share of GDP for several reasons. One is that trade is often a higher share of their total economy, so a given level of tariffs brings in more money: this can be especially true for small island economies. Also, developing countries often have a larger part of their economy in the “informal” sector, which is administratively difficult to tax. By contrast, taxing what comes over the border is comparatively easy. Shambaugh writes: “At 1.2 percent of GDP, the U.S. would be joining countries like Zambia and Tunisia, and closing in on Sierra Leone (though well below the small island states like Vanuatu).”
 

Much of Shambaugh’s essay explains why tariffs are bad for consumers, bad for multinationals, and bad for economic growth, and for those who are not already bored and exhausted by my own attempts to explain these reasons, I commend his explanation to you. I’ll just add that if this particular federal tax increase is the only political acceptable one for the current configuration of US politics, then it would probably be prudent to commit the additional revenue to lower budget deficits over time (and to offset part of the reduction in federal revenues from the “One Big Beautiful Bill Act” signed into law in July 2025), rather than treating it as “free” for the spending.

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