Commerce Secretary Howard Lutnick recently defended the Trump administration’s tariff strategy, emphasizing that the current 10% tariffs are generating over $30 billion per month in revenue without causing consumer price hikes. Speaking on NewsNation’s “CUOMO,” Lutnick dismissed concerns about the negative effects of tariffs, claiming that most of the costs are absorbed by foreign countries and currency fluctuations, rather than U.S. consumers.
Tariffs and Economic Gains: A Revenue Boost
During his interview, Lutnick highlighted that the U.S. is currently bringing in more than $30 billion monthly from the 10% tariffs on goods from foreign countries. “The United States of America is taking in more than $30 billion a month from these 10% tariffs around the world,” he said, adding that the country’s earnings are on the rise while its deficit continues to decline. This strategy, according to Lutnick, is a positive revenue generator for the U.S. economy, even as companies like Amazon report no significant changes in demand or pricing due to the tariffs.
Tariffs Above 15% Could Affect Consumers
Although Lutnick is confident in the economic benefits of the 10% tariff rate, he acknowledged that tariffs above 15% could begin to affect consumer prices. He argued, however, that higher tariff rates would mostly be absorbed by China, not the American consumer. This tariff structure, according to Lutnick, also serves as leverage in trade negotiations, encouraging other nations to open their markets to American businesses in exchange for lower rates. This “negotiating leverage” is key to achieving better trade terms for American farmers, ranchers, and other industries.
Criticism of CBO Estimates and Market Concerns
Lutnick also pushed back against criticism from the Congressional Budget Office (CBO), which had warned that the Republican tax legislation would increase the deficit. He described the CBO’s scoring mechanisms as “silly nonsense,” arguing that they fail to account for the revenue generated by tariffs. Unlike traditional budget items, tariff income is not factored into specific legislation, and Lutnick pointed out that this makes it difficult for agencies to properly assess its impact on fiscal policy.
Investment Commitments and Job Creation
Despite concerns from some financial analysts, Lutnick remained optimistic about the long-term effects of the tariff policy. He pointed to the significant investments made by major tech companies like Apple, Meta, and Nvidia, each committing $500 billion to a broader $10 trillion manufacturing initiative. These investments, Lutnick argued, will create millions of high-paying jobs, driving economic growth and contributing to an anticipated 4% GDP growth rate. He projected that this surge in manufacturing investment would help create 5 million high-paying jobs for Americans.
Small Business Relief and Future Trade Negotiations
When asked about the struggles faced by small businesses in sourcing materials, Lutnick reassured that relief would come as trade negotiations with China progress. He emphasized that the broader economic benefits from tariff revenue and investments would eventually benefit small businesses, particularly through planned tax relief policies, including the elimination of taxes on tips and overtime pay.
Lutnick’s comments present a robust defense of the tariff strategy, claiming it as a key tool for enhancing U.S. economic power and achieving trade balance. As the debate over tariffs continues, his stance underscores the ongoing tension between short-term economic concerns and long-term policy objectives.
