Donald Trump used his social media platform on Tuesday to share some seemingly good news. “The United States is taking in RECORD NUMBERS in Tariffs,” the president wrote.
That certainly sounded encouraging, at least until evidence got in the way. CNBC reported the day after the Republican’s online boast:
U.S. Customs and Border Protection appears to be contradicting President Donald Trump’s comments on the daily revenue generated by his latest slate of tariffs. The agency said in a statement to CNBC on Monday, “Since April 5, CBP has collected over $500 million under the new reciprocal tariffs, contributing to more than $21 billion in total tariff revenue from 15 presidential trade actions implemented since Jan 20, 2025.”
The report went on to note that while Trump has repeatedly claimed that the United States was collecting $2 billion per day from tariffs, “the most recent data released Monday by the Treasury Department shows the department’s daily statement of total deposits listed under ‘Customs and Certain Excise Taxes’ as $305 million. All tariffs are collected by U.S. Customs at the point of entry.”
On the surface, it’s of interest to see evidence that discredits the president’s inflated boasts, but deceptions and falsehoods like these from Trump are hardly unusual. Indeed, I’m hard-pressed to imagine why anyone would’ve believed the Republican’s claims about tariff revenue in the first place, given the frequency with which the president makes comments about trade policy that are completely divorced from reality.
But just below the surface, there’s a larger significance.
As recently as a few days ago, Trump sat down with Fox News and claimed, in apparent seriousness, that there’s a “real chance” that tariffs would generate so much revenue that the United States would no longer need income taxes.
This idea, which he’s peddled before, has always been bananas. In fact, “It is literally impossible for tariffs to fully replace income taxes,” as Kimberly Clausing and Maurice Obstfeld, two senior fellows at nonpartisan think tank the Peterson Institute for International Economics, wrote last year.
And yet, Trump seems quite committed to the idea. Three months ago, shortly before his second inaugural, the Republican announced plans to create an “External Revenue Service,” so that the U.S. would no longer have to rely on the IRS. He repeated this in his inaugural address, boasting that this External Revenue Service would collect “massive amounts of money pouring into our treasury.”
The president’s allies quickly chimed in. Commerce Secretary Howard Lutnick boasted last month, “We’re gonna make the External Revenue Service replace the Internal Revenue Service.” Around the same time, Republican Sen. Josh Hawley of Missouri added, “I love Trump’s idea to get rid of the Internal Revenue Service. Let’s make it the External Revenue Service.”
But the latest data reinforces the inconvenient fact that this entire approach is a folly. The White House is clearly destabilizing the existing tax agency, but if the president and his cohorts believe the IRS can simply be mothballed while the U.S. government relies on tariff revenue, the data shows otherwise.
