Where does the money generated from tariffs go?
The Trump administration predicts tariffs will generate billions of dollars, but where will that money go?
WASHINGTON ― With the stock market poised to plummet further, President Donald Trump on Sunday night defended his massive tariffs that have rattled investors, telling reporters, “sometimes you have to take medicine to fix something.”
Trump remarks came as U.S. stock futures tumbled Sunday evening, led by the Dow Jones Industrial average futures dropping more than 1,200 points, pointing to another bruising day ahead on Wall Street Monday.
“What’s going to happen with the market? I can’t tell you,” Trump said aboard Air Force One as he returned from his Mar-a-Lago Florida home, where he’s stayed since Thursday. “But I can tell you, our country has gotten a lot stronger, and eventually, it’ll be a country like no other.”
Since announcing his steeper-than-expected tariffs on all imports last Wednesday, the stock market has suffered its worst collapse since the COVID pandemic. The Dow Jones industrial average lost 9.2%, the S&P 500 fell 10.5% and the tech-heavy Nasdaq tumbled 11.4%.
Trump pushed back when a reporter asked whether there’s a level of pain in the stock market that he’s unwilling to tolerate.
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” Trump said. “We have been treated so badly by other countries because we had stupid leadership that allowed this to happen. They took our businesses, they took our money, they took our jobs, they moved it to Mexico, they moved it to Canada, they moved a lot of it to China.”
Trump has argued the higher tariffs — which seek to roll back decades of globalization — are critical to rejuvenate America’s declining domestic manufacturing sectors and create a level playing field with other countries that impose tariffs on U.S. exports.
“No, that’s not so,” Trump said when asked whether he’s intentionally trying to crash the market. Trump on Friday raised speculation when he shared a link to a video on his social media platform, Truth Social, that claimed the president was “Purposely CRASHING The Market.”
“But I do want to solve the deficit problem that we have with China, with the European Union and other nations,” Trump said.
Trump last week imposed a 10% minimum tariff on all imports coming into the country and even higher reciprocal tariffs on the U.S.’s biggest trading partners, including China and the European Union. The baseline tariff went into effect Saturday, and the reciprocal tariffs will begin Wednesday.
While in Florida, Trump spent four consecutive days at one of his golf course properties. As a trade war erupted globally, Trump said he spoke to many world leaders over the weekend, making clear to them that he’s moving forward on the tariffs.
“I spoke to a lot of leaders ‒ European, Asian from all over the world,” Trump said. “They’re dying to make a deal. But I said we’re not going to have deficits with your country. We’re not going to do that because, to me, a deficit is a loss.”
Reach Joey Garrison on X @joeygarrison.