Global Macro Chart of the Day (#120): Shrinking tariff revenue

Research evidence excerpt

Global Macro Chart of the Day (#120): Shrinking tariff revenue

Global Research

9 July 2026ab

Global Macro Chart of the Day Economics

Global(#120): Shrinking tariff revenue

Arend Kapteyn

Economist

arend.kapteyn@ubs.com

+44-20-7567 0531

Tariff revenue is falling

Since "Liberation Day" (April 2025), customs duty receipts peaked in October 2025 at

$33 billion. Annualized, that amounted to roughly 1.3% of GDP. At the time, we

estimate the statutory tariff rate was still around 14.4%, while the effective tariff rate

(customs duties divided by imports) was approximately 12%.

Since then, tariff revenues have come under pressure from both lower tariff rates and a

shrinking import base. A series of exemptions, together with the Supreme Court ruling

on the IEEPA tariff regime and its replacement by alternative trade measures, has

reduced the statutory tariff rate to roughly 10.4%. Meanwhile, the effective tariff rate

has fallen to around 7%. One reason is compositional: tariffs have sharply reduced

imports (e.g. from China) and less imports means less tariff revenue. Excluding

technology products—many of which remain exempt—U.S. imports are running about

24% below their pre-Liberation Day level. As a result, gross customs duty collections are

now annualizing at roughly 0.8% of GDP, well below their late-2025 peak, and only

about ½ % GDP above pre-Liberation Day custom receipts.

However, even this overstates the fiscal contribution of tariffs because it reflects gross

rather than net collections. In May, net customs duties fell to -$42 million—effectively

zero—as the administration began issuing refunds on previously collected IEEPA tariffs.

Refund payments totaled almost $22 billion during the month. While it remains unclear