Exploring Trump's Claim of Using Tariffs to Pay Down $21 Trillion in Debt

Trump claims he will use tariffs to pay down the national debt. Let's explore the idea with pictures.

Trump's Claim

Data for the above chart downloaded from US Government Debt, not an official government website. There are lots of excellent charts one can view already made or create from downloaded data.

Budgeted vs. Actual Deficits

I created the above chart showing budgeted deficits vs what actually happened. I calculated actual deficits by subtracting the year-over-year national debt from the year-over-year national debt from the prior year.

Projections vs Reality

In nearly all cases, the actual deficit is way higher than projected. Why?

Because the projected deficit does not include all of the amount owed to the Social Security Trust Fund. That amount is called off-budget. But when the calendar year rolls over, the difference magically appears as a bigger than projected increase in the national debt.

Trump Projected Deficits

Deficits under Trump are expected to range from $666 billion to $987 billion, increasing every year. The total projected sum is about $3.47 trillion.

Tariff Study

CNBC reports US Reaps More than $1.4 Billion from Steel and Aluminum Tariffs.

The obvious problem with the study is that it does not include any losses.

Let's ignore the losses and assume there are only gains. In fact, let's assume the gains will be 100 times greater annually, without any losses.

Question of the Day?

Even if the deficit actually comes in at the projected rate (trust me, it will underperform expectations), what is the likelihood tariffs will reduce the national debt?

The answer of course is ZERO.

Trump's budget will add a minimum of $500 billion every year to the national debt.

Mike "Mish" Shedlock

Comments (18)
No. 1-11

Tarrifs AND the raise he's asking the troops to forgo. What a warrior!


Considering obama added $10 trillion to the deficit - this looks like a step in the right direction. And we are not even discussing the Great QE Unwind.


deficit running quarter trillion per quarter in a "booming" economy!Subtract the phony,manipulated bait n switch accounting scams DC uses to pretend the deficit is "only" a trillion per year,real deficit is more than double that,So no,sorry nothing is gettin paid down (ever)!Inflated away/defaulted on sure,but paid down....lol!


Kudos to Mish for looking at the year-to-year difference in debt instead of the fiscal deficit. The tariffs are of course not in the place of taxes, but are a very uneven, underhanded, and opaque form of taxation (of American consumers & companies). Pity you did not also explore the relationsip between fiscal and trade deficits from a national accounts point of view: For a businessman and business graduate, Trump is showing yet again how little he grasps of the actual mechanics of the real world.


We just add a bunch of taxes to lower the taxes on "our" people! And abandon free market principles to save the free market! And go to war for peace! Heck, why not? The idiots lap it up uncritically every time....