American economists believe that the increase in customs duties could slow the growth of American debt, but would not make it possible to obtain a significant reduction, according to a report published Sunday by Fortune magazine on its website.
US President Donald Trump has repeatedly said that revenue from the increase in customs duties could both reduce US national debt by $ 37,000 billion and finance a public “dividend”.
Its main objective is “to reimburse the debt, which will be very important”, but it is also possible that “we have gone so much money that we can very well pay a dividend to the American people,” Trump said at the beginning of the month.
The report of Fortune magazine, citing several American economists, expressed skepticism about the president’s assertion.
Joao Gomes, professor of finance and economy at the Wharton School of the University of Pennsylvania, said that customs revenues could compensate for certain costs of “One Big, Beautiful Bill Act”, which, according to projections of the Congressional Budget Office, should add $ 3,000 billion to the debt by 2030, but that they should not have any significant impact on the debt global.
Desmond Lachman, a senior researcher at the American Enterprise Institute, said that Mr. Trump’s assertion that he was going to raise $ 300 billion was just a “drop in the ocean” compared to the country’s growing debt. “The country is on a really dangerous debt path,” he said.
Mr. Lachman also warned that if Mr. Trump presented customs duties as a job creation or debt reduction tool in order to strengthen his political support, investors were likely to be convinced. “The markets are not stupid. They know how to do calculations and realize that it is absurd,” he added.
The report also stressed that current revenues from customs duties did not even cover the interests of American debt, not to mention it. Citing data from the US Treasury, he said that the interests of the national debt amounted to $ 60.95 billion in July, while revenue from customs duties were only $ 29.6 billion.
