U.S. Tariff Revenue Set to Top $300 Billion This Year? Treasury Secretary Emphasizes Debt Repayment

August 20 — U.S. Treasury Secretary Janet Yellen indicated on Tuesday that she expects federal revenue from President Trump’s sweeping tariff measures to surpass earlier projections of $300 billion, and affirmed that the proceeds will be dedicated first and foremost to retiring the national debt rather than issuing rebate checks to citizens.

Yellen noted that Treasury data through July show approximately $100 billion in tariff collections since April, when the administration’s global duties took effect. While President Trump has publicly floated the idea of using these funds both to reduce the debt and to deliver “dividends” to the American public, recent proposals from some legislators to issue at least $600 per adult and dependent have not been embraced by the Treasury. Yellen stressed that she and the president remain singularly focused on debt reduction.

“We will work to lower the deficit‐to‐GDP ratio and begin paying down our obligations,” Yellen said. “At the appropriate time, these revenues could be redirected to benefit the American people, but for now our priority is debt repayment.” She added that Monday’s reaffirmation of the U.S. AA+ credit rating by S&P Global underscores the importance of that fiscal discipline.

Yellen also suggested that the U.S. economy could return to the “healthy, low‐inflation growth” of the 1990s but attributed current struggles—particularly in housing and among low‐income families saddled with high credit‐card debt—to persistently elevated interest rates. She highlighted robust capital expenditures driven by artificial intelligence and tax incentives, even as residential construction remains constrained.

President Trump, she noted, has urged the Federal Reserve to lower its policy rate to stimulate homebuilding and, ultimately, ease housing costs over the next one to two years. U.S. Census Bureau figures released Tuesday showed modest gains in single‐family housing starts and building permits for July, though homebuyer enthusiasm remains muted amid high mortgage rates and economic uncertainty.

Yellen has previously signaled support for a 50‐basis‐point rate cut at the Fed’s September meeting. Recent softening in nonfarm payroll growth has further fueled market expectations: according to the CME FedWatch Tool, there is currently an 86.1% probability of a September rate reduction.