Where is All the Tariff Money Going and Is it Being Used to Help Farmers?

By Bart Fischer and Joe Outlaw

Over the last few weeks, much of the attention around reciprocal tariffs has centered on the Supreme Court’s ruling about President Trump’s use of the International Emergency Economic Powers Act (IEEPA) to levy tariffs. While many questions have been raised about the impact of the court’s ruling on tariff revenue already collected—with a federal judge on the U.S. Court of International Trade ruling on this issue just yesterday—this article focuses on where tariff revenue goes once it’s collected. Interestingly enough, the answer to that question is rooted in the Agricultural Adjustment Act (AAA) of 1935.

How much tariff revenue has been collected?

From 2017 to 2019, during the first Trump Administration, customs duties more than doubled (from $34.6 billion to $70.8 billion, respectively).  From 2024 to 2026, the Congressional Budget Office (CBO) estimates that customs duties will increase by 443% (from $77 billion to $418 billion, respectively), a reflection of President Trump’s renewed use of tariffs in his second term.

Figure 1. Customs Duties by Fiscal Year.

Where does the tariff money go?

So, if billions of dollars are collected in tariff revenue, where does it go?  Section 32 of the AAA of 1935 requires that 30% of tariff revenue be used to:

1. encourage the export of agricultural products;
2. encourage the domestic consumption of farm products by diverting surpluses and increasing usage; and
3. reestablish farmers’ purchasing power by making payments in connection with the normal production of any agricultural commodity for domestic consumption.