President Donald Trump and his top officials have repeatedly promised to tap the billions of dollars collected from their historic tariff hikes for key priorities like troop pay, nutrition assistance and farmer bailouts. That’s not how it works.
The administration has brought in about $200 billion in tariff revenue so far this year, cash the president and members of his Cabinet have boasted is a sign their tariff hikes are succeeding — and have suggested they can now use at their discretion.
“We’re going to take some of that tariff money that we made, we’re going to give it to our farmers, who are, for a little while, going to be hurt until the tariffs kick in to their benefit,” Trump told reporters in the Oval Office last month. “So we’re going to make sure that our farmers are in great shape, because we’re taking in a lot of money.”
The reality, however, is that the White House has extremely limited power to direct those funds without congressional direction, since revenue generated by the federal government flows into the Treasury and Congress decides how that money gets doled out. While the president has tested the bounds of the executive branch’s power over spending by freezing, shifting and canceling billions of dollars in other cash Congress has already approved, administration officials have thus far struggled to find ways to use the tariff revenue as Trump and his officials have promised.
“The Constitution clearly provides the legislative branch the authority to levy tariffs and taxes, and to spend and appropriate money,” said Sen. Jerry Moran, a Kansas Republican and a top appropriator. “So while I’m certainly interested in the White House and President Trump’s suggestions, there’s the necessity of Congress acting to implement that suggestion, if that’s the conclusion of Congress.”
Contrary to the claims of Trump, Vice President JD Vance and White House press secretary Karoline Leavitt in recent weeks, the president’s top trade official has acknowledged the conundrum.
“I mean, listen, when the tariff money comes in, it goes to the Treasury of the United States. And Congress has to tell it — has to authorize it and appropriate it — right?” U.S. Trade Representative Jamieson Greer said in remarks at The Economic Club of New York earlier this month.
“It’s not, like, ‘Jamieson’s tariffs’ that he gets to pay out,” Greer continued. “That would be really nice.”
So while Vance said Sunday that the administration would use tariff revenue to pay military salaries during the shutdown, the Office of Management and Budget says troops have been paid by tapping military research and development funding.
The money the Trump administration is using to fund nutrition assistance to low-income moms and babies during the shutdown is not a product of Trump’s new tariffs either, despite Leavitt’s statement earlier this month that it would be funded by income from new “Section 232 tariffs”— i.e. duties on specific industries like copper, automobiles, steel and aluminum.
Instead, the administration is providing a lifeline for the Special Supplemental Nutrition Program for Women, Infants and Children, known commonly as WIC, by pulling money from an account that funds things like school breakfast and lunch programs. Some of the money in that nutrition account comes from import revenue from prior years, as authorized by a 90-year-old law, along with other funding Congress provides each year.
The most glaring unfulfilled promise to tap tariff revenue involves aid for farmers whose workforces and incomes have been decimated by the one-two punch of Trump’s immigration crackdown and trade wars.
China, U.S. agriculture’s top export market in recent years, has stopped purchasing soybeans and other row crops since the trade war between the two countries escalated in May, leaving harests piling up and farmers panicking.
Farmers “need help. All of our farmers do,” Sen. Josh Hawley (R-Mo.) said in an interview Thursday. “We should divert tariff revenue. … We oughta spend, you know, $20 billion or something on farmers.”
That’s roughly how much the Agriculture Department paid out to farmers hurt by Trump’s trade war with China in his first term. But the USDA fund the administration tapped in 2020 is now running low.
Republican appropriators on Capitol Hill and USDA officials have scrambled to figure out how they could use tariff revenues for farmers. Some Republicans on Capitol Hill are privately warning, however, that trying to pass a bill to that end would give Democrats an opportunity to make their own demands or shut down the plans entirely. And some lawmakers have acknowledged that the administration could attempt to spend the money anyway.
Sen. John Kennedy (R-La.), gave a definitive “yes” when asked if Congress would have to authorize the use of tariff funds.
“That doesn’t mean the president’s not going to do it and then sort out the process later,” Kennedy added. “I mean, you see what I see. And I see what you see.”
The administration still hasn’t offered agriculture groups any details on what an aid package would look like and whether they can actually use tariff funds for the bailout. They’re instead preparing money from an internal USDA emergency fund, contrary to what the president teased. But that process has been delayed by the ongoing government shutdown, the administration has said.
“They’re finding that they’re constrained by the law and the Constitution,” Hawaii Sen. Brian Schatz, the Senate’s next Democratic whip. “They’re learning that just declaring something to be the case doesn’t make it true.”
Even if the White House finds ways to move the tariff funds to bankroll its agenda, there are limits to how far Trump officials can stretch those dollars. U.S. tariff revenue has increased substantially as a result of Trump’s soaring rates on imports from around the world, but it still only makes up about 4 percent of the $4.6 trillion the U.S. government has collected so far this year, mostly through taxes on income, Social Security and Medicaid.
The non-partisan Congressional Budget Office projected that tariff revenue will reduce the U.S. budget deficit by $4 trillion if the duties are left in place until 2035. The $4 trillion figure includes $3.3 trillion in revenue, as well as $700 billion in savings on federal interest payments, and would potentially wipe out any increases to the federal debt from the GOP tax and spending package Trump signed into law in July.
“The basic core thing is tariff money is not different from other sorts of money,” said Ed Gresser, a former assistant U.S. Trade Representative who now serves as a director at the Progressive Policy Institute. “And relative to these other sorts of money, it’s small. It’s costly to the public, but it hasn’t changed the government’s fiscal position at all.”
Grace Yarrow, Doug Palmer, Ari Hawkins and Marcia Brown contributed to this report.
