Trump seeks to close revenue gap with raft of new tariffs

The UAE Federal Government Budget for 2026 will accelerate efforts to realise the leadership's vision of building a sustainable future: Sheikh Maktoum

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WASHINGTON: The Trump administration this week stepped up its ambitious effort to replace about $1.6 trillion in lost tariff revenue that was eliminated by the Supreme Court's decision to strike down a range of the president's import taxes.

Recovering that lost revenue, which the White House was counting on to help offset the steep, multi-trillion dollar cost of its tax cuts, is possible but will be challenging, experts say. The administration has to use different legal provisions to impose new duties, and those provisions require longer, complex processes that US companies can use to seek exemptions. It could be months or more before it is clear how much revenue the replacement tariffs will yield.

"I wouldn't bet against this administration being able to get back on paper the same effective tariff rate they had before," said Elena Patel, co-director of the Urban-Brookings Tax Policy centre. But the new approach will "make it easier for people to contest the tariffs, which is going to put a big asterisk on the revenue until all that is settled." On Wednesday, US Trade Representative Jamieson Greer said the administration will investigate 16 economies - including the European Union - over whether their governments are subsidizing excessive factory capacity in a way that disadvantages US manufacturing. The investigation will also cover China, South Korea, and Japan, Greer said.