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White House aide Peter Navarro claimed Sunday that President Donald Trump's new tariffs would raise more than $6 trillion in federal revenue over the next decade, a figure that experts said would almost certainly represent the largest peacetime tax hike in modern U.S. history.
Appearing on Fox News, Navarro said the president's tariffs on auto imports, set to take effect Wednesday, would raise $100 billion per year. Meanwhile, a regime of additional tariffs - details of which have yet to be released - would raise another $600 billion per year, or $6 trillion over the next decade, Navarro said.
Navarro's remarks suggest Trump is preparing dramatic new measures for Wednesday, which the president has referred to as "Liberation Day." Navarro is among the most hawkish voices on trade in the president's inner circle, and it was not immediately clear whether he was previewing official administration policy or speaking for one side of an internal debate over the tariffs.
Also speaking on Fox News on Sunday, Kevin Hassett, director of the White House National Economic Council, declined to outline Trump's tariff plans.
"I can't give you any forward-looking guidance on what's going to happen this week," said Hassett, who is widely regarded as more skeptical of tariffs than Navarro. "The president has got a heck of a lot of analysis before him, and he's going to make the right choice, I'm sure."
Whatever the case, Navarro's comments are sure to rattle markets amid intensifying fears about the global trade war Trump has touched off since taking office in January. Though investors had appeared to cheer Trump's return to the White House, markets have since tumbled, with the benchmark S&P 500 on track to finish the first quarter down about 5 percent.
Tariffs are taxes imposed on foreign goods imported into the United States. A tariff regime that generated $600 billion per year would amount to the biggest increase in federal tax revenue since World War II, according to budget expert Jessica Riedl, a senior fellow at the Manhattan Institute, a center-right think tank.
"We've never seen a president propose such a drastic tax increase at a time where there is no national emergency requiring it" and the economy is already slowing, Riedl said. "You just do not hear numbers like $6 trillion over 10 years in legislation or executive orders."
By way of comparison, the U.S. is set to spend nearly $900 billion on the Pentagon this year. Extending Trump's 2017 tax cuts is projected to cost roughly $4 trillion over the next decade, adding roughly $400 billion a year to the national debt.
Generating $600 billion a year in fresh revenue theoretically would cover the cost of those tax cuts and then some. But economists say new taxes of that magnitude also could deepen instability on Wall Street and further increase the risk of a U.S. recession.
The Trump administration argues that steep tariffs are necessary to bring production and manufacturing jobs back to the United States. "The message is tariffs are tax cuts. Tariffs are jobs. Tariffs are national security," Navarro said. "Tariffs will make America great again."
Navarro offered no details to explain his enormous revenue projection. But Trump has in recent days revived the idea of imposing a single universal rate on all imports to the United States, regardless of the product or the country of origin. During the 2024 presidential campaign, Trump proposed setting this flat tariff rate as high as 20 percent.
Because the U.S. imports more than $3 trillion worth of goods per year, simple math suggests that a 20 percent import tax on all goods could raise close to $600 billion in annual revenue. However, economists argue that such a tax ultimately would raise far less because the costs would be passed on to American consumers in the form of higher prices, and consumers would therefore purchase fewer imported goods.
In an interview with NBC on Saturday, Trump nodded to this effect, saying he "couldn't care less" if his auto tariffs raise prices, because higher prices on imports would encourage people to buy American-made cars instead.
Economists in both parties have heavily criticized a universal flat tariff, arguing that it would raise prices indiscriminately, striking even some goods - such as food and cheap consumer electronics - that either cannot be produced in America or make little sense to produce domestically.
This month, Treasury Secretary Scott Bessent outlined a more moderate approach to "Liberation Day" that calls for the United States to determine a new tariff policy for its each of its key trading partners, leaving room for negotiations and dealmaking. But Trump has told advisers in recent days that he is wary of being insufficiently ambitious with his tariff policy, and it remains unclear precisely what Wednesday will bring.
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