US expects US$50 billion in monthly tariff revenue, Commerce chief says
WASHINGTON: The United States expects to collect US$50 billion or more in tariff revenues each month as higher levies on imports from dozens of countries take effect, Commerce Secretary Howard Lutnick said on Thursday (August 7).
The new figure represents a sharp increase from US$30 billion in monthly tariff income reported last month.
"And then you're going to get the semiconductors, you're going to get pharmaceuticals, you're going to get all sorts of additional tariff money coming in," Lutnick told Fox Business Network.
TARIFFS ON CHIPS AND PHARMA TO BE ANNOUNCED
US President Donald Trump’s latest wave of tariffs took effect on Thursday, raising the average import duty to its highest level in a century. Countries now face tariffs ranging from 10 to 50 per cent.
Trump on Wednesday also announced plans to impose a 100 per cent tariff on imported semiconductor chips unless companies commit to manufacturing in the US. Pharmaceutical imports will face a smaller initial tariff that could rise to 250 per cent over time.
Details of these sector-specific tariffs are expected in the coming weeks, pending the outcome of Commerce Department investigations into whether the imports pose national security risks.
"His objective is to get semiconductor manufacturing done here," Lutnick said, predicting the effort could generate up to US$1 trillion in investment to strengthen domestic manufacturing.
EXEMPTIONS POSSIBLE FOR CHIPMAKERS
Lutnick said companies could win exemptions from the proposed chip tariffs if they submit plans to build semiconductor plants in the US and have those projects verified by independent auditors.
Some exemptions have already been granted, including to the European Union, which agreed to a 15 per cent tariff covering chips and other exports as part of a broader deal. Japan has also said Washington committed not to impose a worse tariff rate than other countries on semiconductors and pharmaceuticals.
The push to revitalise the domestic chip industry predates Trump’s latest moves. In 2022, Congress approved a US$52.7 billion subsidy programme under then-President Joe Biden to support semiconductor manufacturing and research.
All five of the world’s leading-edge chipmakers have since announced plans to establish factories in the United States.
The Commerce Department said last year that US chip production had declined from 40 per cent of global output in 1990 to just 12 per cent.
CHINA TARIFF TRUCE EXTENSION LIKELY
Lutnick also commented on ongoing talks with China to extend a bilateral tariff truce that is set to expire on August 12.
“It feels likely that they're going to come to an agreement and extend that for another 90 days,” Lutnick said. “But I'll leave it to that team.”
