The Supreme Court could strike down a portion of the tariffs, but the Administration sees similar tariffs under different Acts. “You should assume they’re here to stay”: Bessent.
By Wolf Richter for WOLF STREET.
The net amount in tariffs, after refunds, that the federal government collected jumped to a record $32 billion in October.
Since the tariff cash began flowing into the Treasury General Account (the government’s checking account) in April, the government has collected $184 billion in tariffs in ever larger monthly increments.
Compared to corporate income taxes. If collections from tariffs run at the October pace for a full fiscal year, they would generate $384 billion in receipts. It’s not nothing: Corporate income tax receipts received by the Treasury during the Fiscal Year through September amounted to $452 billion, or $37.7 billion per month on average.
The rate of tariffs in October was just 15% less than average corporate income tax receipts, representing a meaningful reduction of the terrible fiscal deficit of what it would be without the tariffs.
Methodology: The tariff data is from the Monthly Treasury Statement (MTS), except for October, which is from the Daily Treasury Statement (DTS) for October 31, released today. The DTS lists “customs duties” and “certain excise taxes” combined as one line item. The MTS – the October edition will be released later in November – separates “customs duties” from “excise taxes.” The difference between the DTS figure and the MTS figure reflects the excise taxes and has averaged $1.7 billion a month for the past 12 months and $1.9 billion for the past three months. So the October figure here is the DTS amount of $34.2 billion minus $1.9 billion in estimated excise taxes.
If the Supreme Court rules against the Trump administration, the tariffs that would be invalidated are only the “reciprocal” tariffs that were imposed by executive orders under the 1977 International Emergency Economic Powers Act (IEEPA), citing as trigger the huge trade deficits as an “unusual and extraordinary threat to the national security and economy of the United States.”
All other tariffs imposed by Trump’s executive orders under different Acts would remain valid, such as those imposed under the Trade Expansion Act of 1962, Section 232 to protect strategic sectors including motor vehicles, semiconductors, pharmaceuticals, robotics, aircraft, and copper; and under Section 301 involving unfair trade practices investigations.
Bessent pointed out in an interview, if the tariffs imposed under IEEPA are struck down, the Administration will be ready to impose similar tariffs under different Acts, for example under Section 338 of the Tariff Act of 1930, which allows the imposition of tariffs up to 50% on countries that discriminate against US commerce; or Section 122 of the Trade Act of 1974, which allows broad 15% tariffs for 150 days to calm trade imbalances.
“You should assume that they’re here to stay,” Bessent said.
So whatever the Supreme Court ruling will be, the 2025 vintage tariffs won’t go away, though they may be somewhat smaller and a little different than what they’re now. All of this uncertainty obviously contributes to the tariff chaos that has been going on for 10 months.
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“$452 million” perhaps should be “$452 billion”
I was just dreaming of the good old times when $452 million was still worth something 🤣
Thanks.
It’s quite jaw dropping that we’re within striking distance of collecting as much tariff revenue as we do corporate tax revenue. I’m of the opinion that the later is the problem, since it only represents about 11% of all federal government revenue.
You’ve nailed it. MNCs have become too good at reducing their taxes in the US through their global legal structures.
What Trump is doing with the tariffs is basically corporate tax in disguise. A lot easier from a marketing standpoint, especially when running as a Republican. You sell it as a protection measure against foreign countries who take advantage of the US. If no local alternative, the importer will eat the tariff (lower margin). In some cases the exporters will eat some/all. Worst case scenario it’s a sales tax to the US consumer (still in a very healthy state) as the tariff will be passed on as a price hike.
Mathematically, they’ll likely have to stay. They are inefficient as hell, but we’ve basically found no other politically viable way to increase revenue, or cut spending.
I build modern manufacturing plants. 15% ain’t brining new production where we have global feedstock/markets to the US, automation be damned. The upstream infrastructure to build the machines we need just doesn’t exist either, so paying a premium on labor and capital equipment just makes this further from reality.
So yeah, just a roundabout corporate tax, potentially some passed as a regressive flat tax.
Something else will have to be done to address CoL issues (real or perceived, the data and sentiment don’t really agree here).
“upstream infrastructure to build the machines we need just doesn’t exist either,”
It NO LONGER exists because manufacturers like you have killed it over the past four decades by purchasing from overseas suppliers and crushing US suppliers. That’s exactly what US version of globalization, which the US tax code subsidizes, accomplished after raging for 40 years. That’s why the tariffs are needed now more than ever in order to change the math of the US tax code and allow for those US industries to revive and grow again.
And no giant Corpo has collapsed despite absorbing the cost as Wolf states. Its almost they could have been paying more /their share of taxes all along. This is all great and the best tax in awhile. However the implementation is so crude the collateral damage to small niche businesses is hitting me hard. I order many small bespoke electronics from individuals around the world. Many similar hobbies exist. Often there are only one or two people in the whole world producing something. These people may sell 100 or less items yearly. They cannot absorb tarriffs. There is no onshoring to be done. There is no damage to the US economy. A big Corpo will never see value in producing such items especially with high quality.
Example: a 250$ order from Canada with some small synthesizer pieces, a few contain aluminum perhaps a few grams. Because of any aluminum content and a petty spat w Canada, I paid 129.45$ in tarriffs (15% plus 50% + some US govt fee and some UPS fees).
The small business in Canada cant figure out what the tarriffs would be nor afford that rate. UPS runs its own racket now as basically the process is that I order and pay, UPS gets package holds in customs and sends a ransom letter, hey we need these fees and tarriffs or no package. Sure I couldve sent it back but there is no one locally producing these items and likely wont be as demand is too small except on a global level.
Many such niches hobbies and businesses exist producing high quality goods on a small scale.
These taxes/tariffs are essentially a global war on small businesses. Party of small business is dead and rotting.
Id rather have access to the best of the whole world than only 4%
Sounds like kike an incredible opportunity for some ambitious young American electrical engineers to start a small company manufacturing the rare components you’re talking about and to eventually dominate the world market for this product. Better to lead these industries then to import them and scratch our heads at how these magical devices from far off lands actually work.
Tariffs are better and fairer.
There is a reason why so many huge corporations are now headquartered in Ireland and then pay so little in American taxes.
Seems like that monthly tariff revenue would fund a year of the Obamacare expansion and open up the government.
The process is to put a bill in front of congress to direct this funding for that purpose.
The process is not to shut down the government because the law passed on obamacare is being followed as passed by congress.
Good. Companies that moved production offshore to avoid paying American salaries while still selling their stuff here at American prices should chip in more than they do. If this squeezes their profits so be it.
I just read that Stellantis is moving production from Europe and Canada to the US to avoid tariffs. More US workers making decent wages who then can maybe afford the Jeeps and trucks that Stellantis sells here.
If the U.S. population is ~ 347 million (≈ 347,000,000) people.
Then $340 billion divided by 347 million = $981.87 (approx) per person.
But it’s not the people that are paying the tariffs; tariffs are a corporate tax and come out of corporate profits that have gotten obese during the high-inflation years as companies jacked up their prices far faster than their costs went up, and now they have to eat the tariffs because they cannot further increase consumer prices because consumers are in a price revolt, after getting stripped clean in 2020-2023, as I have shown here endlessly for many months, including here:
https://wolfstreet.com/2025/09/27/corporate-profits-in-nonfinancial-industries-plunge-by-most-ever-in-amid-massive-downward-revisions/
I’m in electrical construction for large facilities – mostly hospitals and life science research and manufacturing. Tariffs have significantly increased construction cost and are being passed on to the customer, but many of our equipment manufacturers have ramped up production here in the states because of them, and these are quality manufacturing jobs that require skill and pay a decent wage. Thus, I can’t judge if they are good or bad. My $$ brain says bad, but my heart says good. Also, I suspect they are often used as an excuse to raise prices, whether or not the product was affected by tariffs. Maybe the $0.50 LED tape light strip inside the light fixture went up to a buck, but the light fixture price increased $10.00. That sort of thing.
I was in a local seafood dive talking with the waitress.
I commented on the high cost of the lobster rolls.
She replied “TARIFFS!”
I asked if they imported these lobsters from overseas.
Nope, from Maine.
🤣
Yes, that’s how it is, tariffs get blamed for everything, including the bad weather.
The “customers” you’re talking about are other companies, not consumers.
I just listened to a podcast and they had a CEO of a Plastic Injector Molding business. All manufacturing had been moved to China over the years. He said Covid and the supply chain issue was a wakeup call. So they started a plant in the U.S. He said the tariffs help a lot for the U.S. manufacturing plant and he is getting market share in the U.S. over his China rivals. They plan on moving move more manufacturing to the U.S. He did say they are losing some business in China because China instituted recipicating tariffs and thus they cannot compete in price vs their Chinese competition in the Chinese market. But most of his sales were always in the U.S. So the tariffs are a plus for him because it is easier to manage local manufacturing plants and does not have to worry about future supply chain issues. (You can have 100% ownership, trade wars, pandemics)
“mostly hospitals”
Notorious for high dollar, wildfire inflation for *decades* before the tariffs.
The medical-industrial complex really doesn’t need any additional excuses for the behaviour it is has gotten away with for decades already.
America fully funded its government with tarriffs (with a few short term suppliments) for its first 140 years.
Became a world power.
8 months in row of manufacturing contracting here in USA per yesterdays ISM, tariffs hasn’t made a change there yet. On another note, Freak the Fu#k out panic sell everything at the top, it’s over!! Ha, I read an article yesterday cows are being killed by vultures. The secular bull market assets and debt will be eaten by vultures in years to come. I am admittedly delusional, so don’t pay attention to the great crash is coming!
LOL, that ISM contraction nonsense. The S&P US Manufacturing PMI, also released yesterday, has been storming higher and accelerating, on higher production and higher orders. But the media didn’t see that one because it doesn’t suit their narrative?
Well true that! I try not to be influenced much, but yeah we will see what the Tarrifs net effect is as times goes on. On the other hand the charts don’t lie., negative divergence is screaming look at me!!!The crash is coming and I think you know it is too. If europe get peace with Russia. Europe will punch us in the face with counter tariffs. Unfortunately, peace may not happen because we need our allies to keep buying our debt!!! Our friends need our military that is the only reason Tarrifs didn’t blow up in our face. It’s doesn’t matter though. The bubble bursting will bring down the houses, yeah the clearing houses are at risk!!! Bankruptcy is coming for Americans! Intoxicated on liquidity, the liquidity DTs and inflation are coming. The crypto cult will sell their AI stocks to meet their margin calls in their crypto holdings, wash repeat all the way down. Thanks, I am influence here or educated only because of confirmation bias is similar. Confirmation bias breaks all of us here!!!
Regarding tariffs and all taxes we need to understand companies that import, export, manufacture, distribute or retail sell; none of them pay taxes. These companies are required to collect monies for the government regardless what label is used. They are required to remit the collections to the government. If they do not pass along all these government levies to the consumer they will not stay in business long. These companies consumer pays eventually for everything, and I am not suggesting that is wrong.
The U S consumer is being used as a HOST for many barnacles living off the HOST’s blood and life. Someday, the HOST is no longer capable of supporting so many parasites.
Now the powers to be have fooled the host by making credit so available to HOSTS. This allows the HOST a limited ability to support more parasites for a limited period of time. U S policy makers have are keeping the HOST alive, not foe the HOST’s best interest…..but for the parasites best interests. A dead host cannot support any parasites long.
Both US policy makers and China policy makers are parasitic to the US consumer as their HOST. In fact, when they provide the already overburdened HOST with more nourishment (credit) and the HOST uses it to consume more, the government tracks it and calls it GDP and celebrates.
The HOST does not look healthy to me, but the HOST’s doctor (Government, policy makers, ) just tell him to keep on eating.
Where will the parasites run to as each host dies off. ?
“If they do not pass along all these government levies to the consumer they will not stay in business long.”
That is just silly. I have wasted countless hours shooting that stuff down over the past 10 months, and zombie-like, it keeps coming back up.
No, tariffs are a corporate tax and come out of corporate profits that have gotten obese during the high-inflation years as companies jacked up their prices far faster than their costs went up, and now they have to eat the tariffs because they cannot further increase consumer prices because consumers are in a price revolt, after getting stripped clean in 2020-2023, see automakers, as I have shown here endlessly for many months, including including in the inflation data and here:
https://wolfstreet.com/2025/09/27/corporate-profits-in-nonfinancial-industries-plunge-by-most-ever-in-amid-massive-downward-revisions/
Wolf,
I am with you part of the way (it has been 25 years since US businesses’ first started appropriating the lion’s share of “China Price” profits – so their profit margins have plenty of fat that can be re-distributed…) but that said…I don’t think it is a slam-dunk, lead-cinch certainty that *all* businesses, in *all* industries won’t be able to/have to pass some portion of tariffs on to the US consumer.
The truth is likely somewhere in-between and the tariffs are simply another half-good, half-assed fix to yet another fundamental problem (the evaporation of US international competitiveness) that the country/DC can’t rouse itself to confront directly – ensuring that the true, long-term problem continues.
Nearly ALL of the inflation has nearly always been and continues to be in SERVICES — housing, insurance, streaming, healthcare, etc. that’s 65% of consumer spending, and services are NOT imported and they’re NOT tariffed, and that’s where inflation is because it’s hard for consumers to battle price increases in services. But the anti-tariff morons in the media and elsewhere willfully refuse to acknowledge that, and they’re looking with a magnifying glass for micro-traces of tariffs getting passed on to consumers in one or the other good.
Goods prices spiked during the high-inflation years BEFORE tariffs, and those anti-tariff morons in the media were fine with it because it was Biden’s free money that did that, and now goods prices are very high and it’s not really possible to raise prices a lot without losing sales, which is why companies are eating the tariffs, and some try to pass them on but their sales drop, and they have to cut prices again.
And what inflation there has been in durable goods over the last 12 months (-0.1% MoM, +1.8% YoY) is in USED VEHICLES which aren’t imported and aren’t tariffed, their prices started rising in August 2024, and I’ve been covering this since then. And they matter — they’re big part of durable goods. New vehicle prices after incentives have been flat at very high levels, electronics prices have plunged, etc.
6:14 AM 11/4/2025
DJIA F 47,190 -283 -0.60%
S&P F 6,801.75 -81.00 -1.18%
NASDAQ F 25,687.00 -416.25 -1.59%
Gold 3,978.50 -35.50 -0.88%
Silver 47.235 -0.814 -1.69%
Crude Oil 60.26 -0.79 -1.29%
Anyone notice how consumer discretion stocks have mostly been in a 2 month downtrend of -4% to -10% while the SPY is up 14%? That is a gap of over 20%.
Stocks like Home Depot, Lowes, Costco, Chipotle, Sprouts, CAVA, AT&T, VZ, Dollar General are in downtrends. These are place people spend money week to week and month to month.
Places I never shop at like NVDA, Google, AMD, Palantir, Hood, Oracle , and Datacenters are all up big.
I don’t know why but it will probably be blamed on tariffs.
So – CalBeachDude –
Post the YTD returns for the same.
Given America’s current welfare state:
“United States government spending as a percentage of GDP is projected to reach 40.50 percent by the end of 2025.”
The Federal Government’s income must be increased, as spending cannot be cut. (There are too many people and groups dependent on Uncle Sam)
With over a $6T budget, the government could confiscate all wealth from all US billionaires and fund the Federal Government for only about 11 months. Taxing income and wealth is not really an option to bring spending and income more into balance.
The poor cannot contribute, the middle class is already maxed out, and the relatively wealthy are paying a very large percentage of the total taxes already.
To all of the anti-tariff folks, what do you suggest?
Don’t tax billionaires.
Just allow them to fail after placing their degenerate gambling bets.
Then you won’t have a job, kid.
Capitalism is difficult for me to understand.
If $32 billion is good, we need to jack the tariffs up by 10x. $320 billion in a month would really be excellent. Hell, let’s go for 100x and get 3.2 trillion in a month. Tariff the hell out of the corporation leeches!
That’s kind of how the used to do it before income taxes.
Interesting to compare with corporate income tax receipts. So if you reduce from corporate tax rate from 35% to 21% since 2018, then you tariff for 8 months in 2025, you might make up for ~10% of the lost revenue over those 7 years? What a charade. Only way the consumer wins is if the actually build out supply in the US to the point where we have oversupply, then prices drop and the economics of the whole thing break and they close the factories and go back to importing. It’s the opposite of whatever free market is.
Why are you comparing “7 years” revenues to “8 months” revenues? Compare average corporate tax revenues per month to monthly tariff intake. And I did that.