Higher tariffs will bring in $50bn a month into US coffers, claims Lutnick

Says additional funds yet to come from semiconductors and pharmaceuticals

Thu, 07 Aug, 2025 - 15:15

Andrea Shalal and Maiya Keidan

US commerce secretary Howard Lutnick said on Thursday he expects the country is heading towards $50bn (€42bn) billion a month in tariff revenues as higher levies on imports from dozens of countries kick in.

"Then you're going to get the semiconductors, you're going to get pharmaceuticals, you're going to get all sorts of additional tariff money coming in," Mr Lutnick said in an interview with Fox Business Network.

When asked whether an August 12 deadline to reach a tariff agreement with China could be extended again, Mr Lutnick said it was possible.

"I think we're going to leave that to the trade team and to the president to make those decisions, but it feels like likely that they're going to come to an agreement and extend that for another 90 days, but I'll leave it to that team."

US president Donald Trump's higher tariffs on imports from dozens of countries kicked in on Thursday, raising the average US import duty to its highest in a century and leaving major trade partners such as Switzerland, Brazil, and India hurriedly searching for a better deal.

The USCustoms and Border Protection agency began collecting the higher tariffs of 10% to 50% at 4.01am Irish time after weeks of suspense over Mr Trump's final tariff rates and frantic negotiations with countries seeking to lower them.

The leaders of Brazil and India vowed not to be cowed by Mr Trump's hardline bargaining position, even while their negotiators sought a reprieve from the highest tariff levels.

The new rates will test Mr Trump's strategy for shrinking US trade deficits without causing massive disruptions to global supply chains or provoking higher inflation and stiff retaliation from trading partners.

After unveiling his "Liberation Day" tariffs in April, Mr Trump has frequently modified his plans, slapping much higher rates on imports from some countries, including 50% for goods from Brazil, 39% from Switzerland, 35% from Canada and 25% from India. He announced on Wednesday a separate 25% tariff on Indian goods, to be imposed in 21 days, over India's purchases of Russian oil.

Tariffs are ultimately paid by companies importing the goods, and passed on in full or in part to consumers of end products.

Mr Trump's top trade negotiator, Jamieson Greer, said the US was working to reverse decades of policies that had weakened the US manufacturing capacity and workforce, and that many other countries shared concerns about macroeconomic imbalances.

"The rules of international trade cannot be a suicide pact," he wrote in a column published by the New York Times.

"By imposing tariffs to rebalance the trade deficit and negotiating significant reforms that form the basis of a new international system, the United States has shown bold leadership," Mr Greer said.

Eight major trading partners accounting for about 40% of US trade flows have reached framework deals for trade and investment concessions to Trump, including the European Union, Japan and South Korea, reducing their base tariff rates to 15%. Britain won a 10% rate, while Vietnam, Indonesia, Pakistan and the Philippines secured rate reductions to 19% or 20%.

"There'll be some supply chain rearrangement. There'll be a new equilibrium. Prices here will go up, but it'll take a while for that to show up in a major way," said William Reinsch, a senior fellow and trade expert at the Center for Strategic and International Studies in Washington.

Switzerland's government was to hold an emergency meeting on Thursday after its president Karin Keller-Sutter returned home empty-handed from an 11th-hour trip to Washington aimed at averting the crippling US import tariff on Swiss goods.

A last-minute attempt by South Africa to improve its offer in exchange for a lower tariff rate also failed. The two countries' trade negotiating teams will have more talks, South African President Cyril Ramaphosa's office said.

Vietnam said on Thursday it will continue talks with the US as it seeks to lower tariffs further still after negotiating a reduction to 20% from the 46% duty Trump slapped on the Southeast Asian country in April.

Meanwhile, Brazil's President Luiz Inacio Lula da Silva told Reuters on Wednesday he wouldn't humiliate himself by seeking a phone call with Mr Trump even as he said his government would continue cabinet-level talks to lower a 50% tariff rate.

Indian Prime Minister Narendra Modi was similarly defiant, saying he would not compromise the interests of the country's farmers.

There were also signs that some countries were rallying together to confront Trump, with Brazil's Lula saying he would call the leaders of India and China to discuss a joint BRICS response to tariffs.

India said on Wednesday that Modi will visit China for the first time in seven years.

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