The now week-plus-long government shutdown has caused the furlough of hundreds of thousands of federal workers. Tens of thousands others have been furloughed and are now working unpaid. Republicans and Democrats are at a standoff on government funding. This impasse has suspended their services. They’ve even stopped critical food inspections and drug inspections.
On the first day of the shutdown, October 1st, that same government collected $315 million from tariffs. This constant revenue stream just continues to grow and increase in importance. In addition, last month the U.S. Treasury Department announced record tariff revenue of $31.7 billion. This large figure has pushed collections up to $190 billion so far this fiscal year to date. This represents an incredible 160% increase over this time last year.
Even better for President Donald Trump, he can frequently boast about these record levels of tariff revenue. Though the shutdown has ended, many federal workers have already experienced devastating financial consequences. That’s nearly 750,000 federal employees affected by the shutdown, who are losing an estimated $400 million in daily wages combined. This situation raises questions about the disconnect between rising tariff revenues and the economic challenges faced by Americans due to the shutdown.
The money collected through tariffs might be used to cover some of the impact from the government shutdown, if only for a time. Yet as this impasse drags on, essential services are still halted, including critical inspections that help safeguard the public’s health and safety.
Senator Ron Wyden of Oregon was especially scathing on the futility of relying on the tariffs for revenues, as federal workers go unpaid during the ongoing shutdown. He stated, “Congress should repeal Trump’s trade taxes and give Americans some relief, not lock in high tariffs and higher prices.”
White House spokesperson Kush Desai responded to PCE’s concerns, reiterating that PCE’s answer really is simple.
“We don’t need any novel solutions to reduce the blow of the Democrats’ government shutdown — all that needs to happen is the Democrats reopening the government by passing a clean continuing resolution as they’ve done many times before.” – Kush Desai
Though lawmakers continue to battle over these tariff collections, their growing collections have fueled a discussion on how they impact average Americans. Indeed, most Americans are already feeling the heat through higher prices on consumer goods caused by these punitive tariffs. Democrats say that for all the additional revenue Democrats claim that it’s coming at a great cost to everyday Americans.