- US tariffs have not boosted manufacturing or reduced the trade deficit, says Gita Gopinath
- US tariff revenue reached $190 billion in 2025, a 160% increase from last year
- Tariffs have raised inflation, notably on appliances, furniture, and coffee
There is no sign yet of the 'Liberation day' Trump tariffs augmenting US manufacturing and paring its large trade deficit with the world, according to former International Monetary Fund Chief Economist Gita Gopinath.
In a post on X, Gopinath criticized US tariffs, noting that based on four key metrics, the "overall score card is negative" for the world's largest economy. A universal 10% tariff on foreign goods took effect on April 5.
She acknowledged that the US government has raised revenue from import tariffs substantially. However, as expected, the taxation is almost entirely borne by American firms who have passed on some of it to consumers. "So it has worked like a tax on US firms/consumers," she said.
In September, the US Treasury Department reported tariff revenue of $31.7 billion, bringing total tariff collections so far in 2025 to $190 billion, a 160% increase compared to the same period last year, according to a CNN report.
It is 6 months since "Liberation day" tariffs. What have US tariffs accomplished?
October 6, 2025
1. Raise revenue for government? Yes. Quite substantially. Borne almost entirely by US firms and passed on some to US consumers. So it has worked like a tax on US firms/consumers.
2. Raise… pic.twitter.com/KZG3UgKB3SGopinath said the US tariffs raised inflation by "small amounts" but more substantially for household appliances, furniture, and coffee.
The US annual inflation rate accelerated to 2.9% in August, the highest since January, after holding at 2.7% in both June and July, in line with market expectations.
"Improve trade balance? No sign yet of that. Improve US manufacturing? No sign yet of that. Overall, the score card is negative," the ex-IMF official said.
The US trade deficit ballooned 32.5% to $78.3 billion in July as record inflows of capital and other goods boosted imports. Inbound shipments soared 6% to $358.8 billion, as per a Reuters report.
Gita Gopinath currently serves as an economics professor at Harvard University in the US.
India has faced a 50% tariff on most of its exports to the US, half of which is a penalty for Indian purchases of Russian oil. Negotiations over a trade deal is yet to yield any agreement.
On the other hand, the Trump administration has entered into bilateral trade deals with Japan, South Korea, Vietnam, the European Union and the United Kingdom. A substantial pact with China is also under works.
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