US Tariffs Set to Generate $50 Billion Monthly, Says Lutnick

US Commerce Secretary Howard Lutnick announced on Thursday that the United States could see a surge in tariff revenues, potentially reaching $50 billion per month. This forecast coincides with the implementation of higher import levies on goods from multiple countries. In an interview with Fox Business Network, Lutnick stated, “Then you’re going to get the semiconductors, you’re going to get pharmaceuticals, you’re going to get all sorts of additional tariff money coming in.”

The new tariffs, which have raised the average US import duty to its highest level in a century, took effect early on Thursday morning, with the U.S. Customs and Border Protection agency beginning to collect rates ranging from 10% to 50%. Major trade partners, including Switzerland, Brazil, and India, are now seeking more favorable terms in the wake of these increased tariffs.

Lutnick addressed questions regarding the potential extension of a deadline for a tariff agreement with China, set for August 12, 2023. He indicated that it was possible to extend negotiations, stating, “It feels likely that they’re going to come to an agreement and extend that for another 90 days.”

The heightened tariffs are part of President Donald Trump‘s strategy to reduce the US trade deficit while avoiding major disruptions to global supply chains or inflating consumer prices. Since unveiling these tariffs, Trump has modified rates several times, imposing significant duties on various countries, including 50% on Brazilian imports and 39% on goods from Switzerland.

In a separate announcement, Trump revealed a 25% tariff on Indian goods, effective in 21 days, due to India’s purchases of Russian oil. These tariffs ultimately affect companies importing the goods, which may pass the costs onto consumers.

Trump’s lead trade negotiator, Jamieson Greer, emphasized that the US aims to reverse decades of policies perceived to have weakened American manufacturing. In a recent column for the New York Times, he stated, “The rules of international trade cannot be a suicide pact… the United States has shown bold leadership.”

International Reactions and Negotiations

Countries affected by the new tariffs have begun to respond. Leaders from Brazil and India are seeking to negotiate better terms, with Brazilian President Luiz Inacio Lula da Silva asserting he would not compromise his position by seeking direct communication with Trump, despite ongoing cabinet-level discussions. Indian Prime Minister Narendra Modi has similarly vowed to protect the interests of Indian farmers in the face of increased tariffs.

Switzerland’s government convened an emergency meeting following a diplomatic trip by President Karin Keller-Sutter to Washington, which failed to yield a resolution to the tariffs on Swiss imports. South Africa made a last-minute attempt to negotiate a lower tariff rate, but this effort did not succeed, prompting further discussions between trade teams.

Vietnam, having negotiated a reduction of its tariff rate from 46% to 20%, announced that it would continue talks with the US to secure even lower rates.

Experts anticipate a significant realignment of supply chains as countries adapt to the changing tariff landscape. William Reinsch, a senior fellow and trade expert at the Center for Strategic and International Studies, noted, “There’ll be some supply chain rearrangement. There’ll be a new equilibrium. Prices here will go up, but it’ll take a while for that to show up in a major way.”

As the global market adjusts to these changes, the outcomes of ongoing negotiations will play a critical role in shaping international trade relations in the coming months.