TLDR:

  • U.S. tariff collections hit $23B in May, pushing monthly total past $30B

  • Lutnick claims tariff income supports rate cuts by easing the federal deficit

  • Powell warns tariffs could fuel inflation, urges caution on lowering rates

  • Online critics argue tariffs raise consumer costs and don’t cut deficits

The US government is now collecting over $30 billion each month from tariffs, according to Commerce Secretary Howard Lutnick. 

This figure comes as debate intensifies over interest rate cuts, with Federal Reserve Chair Jerome Powell signaling caution. While inflation pressures appear to be easing, policy experts remain divided on how tariffs and rate decisions will impact the broader economy. 

Recent customs data also shows a record $23 billion collected in May alone. These developments have added complexity to an already heated conversation about inflation, borrowing costs, and economic growth.

Tariff Collections Reach New Highs

Howard Lutnick claimed the current tariff revenue is topping $30 billion monthly, a sharp rise from earlier figures. He suggested this surge is helping reduce the US deficit by bringing in direct cash to the Treasury. 

In his view, strong revenue combined with low inflation supports an urgent case for rate cuts. However, recent US Customs and Border Protection data revealed a total of $23 billion collected in May, marking a new monthly record. 

I just listened again to Jerome Powell testify. He goes out of his way to call out tariff price increases POTENTIALLY adding to inflation, as if he’s seen some, but,in fact, he testifies that over the last 2.5 months such inflationary price increases have not materialized. ZERO.…

— Howard Lutnick (@howardlutnick) June 25, 2025

Lutnick argued that this windfall should factor into monetary policy decisions. He added that higher tariff income could reduce the need for borrowing, easing pressure on federal interest payments.

Jerome Powell has maintained a careful stance on interest rates, despite calls for immediate cuts. While testifying recently, he acknowledged that inflation had slowed but warned of potential risks ahead. Among them, he flagged tariffs as a possible source of future price increases.

Powell emphasized that inflation expectations, not just past trends, shape rate policy. Although no recent surge in consumer prices has been linked to tariffs, he advised staying alert. His position suggests the Fed prefers to observe long-term effects before acting.

Online Debate Over Tariff Impact

Lutnick’s remarks triggered sharp responses on social media. One user, posting under the handle Caring Guy, disputed the claim that tariffs reduce the deficit. 

He pointed out that tariff revenue is collected from US importers, not foreign producers. These costs, he argued, are passed down to American consumers.

This post demonstrates a couple of things. one this is the stupidest cabinet that has ever been assembled. Two Rich doesn't equate to smart.

Howard, nearly everything in your post is either misrepresented, misunderstood, or dangerously ignorant.

First, Jerome Powell did not say…

— Caring Guy💙🇺🇸🌈✌🏻 (@caringguy1957) June 25, 2025

Critics stressed that using tariffs as a growth tool could backfire by increasing domestic prices and lowering demand. They also warned that revenue from tariffs is not a permanent solution for fiscal shortfalls.

While tariffs may boost Treasury inflows short-term, the Fed’s decisions hinge on broader economic trends. Experts note that rate policy must weigh inflation forecasts, global financial stability, and employment data. 

Reducing rates too soon could risk reigniting inflation or undermining investor confidence.

The conversation continues as Powell’s next policy meeting approaches. Whether rising tariff revenues will influence the Fed’s decision remains to be seen.

 

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