Former President Donald Trump's persistent enthusiasm for tariffs has not wavered since his time in office. However, his recent claims about the power of tariffs to accomplish various goals have drawn skepticism from economists. Mr. Trump has proposed using tariffs as a means to fund child care, boost manufacturing, address immigration concerns, and maintain the dominance of the US dollar in the global economy.

While tariffs do generate some revenue, economists argue that they would only provide a fraction of the funding necessary to achieve the ambitious goals outlined by Mr. Trump. In fact, they warn that tariffs could potentially backfire, inviting retaliation from foreign governments and increasing costs for consumers. Research suggests that the burden of tariffs primarily falls on American businesses and households, rather than foreign entities.

Eswar Prasad, a trade economist at Cornell University, commented that Mr. Trump's attraction to tariffs stems from their political symbolism and flexibility compared to financial sanctions. However, he cautioned that using tariffs to punish countries or discourage dollar diversification could eventually harm the US economy and consumers.

During a rally in Wisconsin, Mr. Trump even suggested utilizing tariffs as a tool of punishment against nations that choose to move away from using the US dollar in international trade. However, economists argue that such threats are unlikely to influence the behavior of other countries and could diminish the appeal of the US dollar as a reserve currency.

Brad Setser, an economist at the Council on Foreign Relations and an adviser to the Biden administration, dismissed the proposal as one of the "craziest" aired by a US presidential candidate, highlighting that the role of the US dollar as a global reserve currency depends on voluntary choice by other countries.

In Mr. Trump's presidency, the percentage of imports subject to tariffs doubled, though it still remained low compared to global standards. He imposed tariffs on various products, including foreign washing machines, solar panels, metals, and a wide range of goods from China. However, the tariffs that Mr. Trump has promised to impose if re-elected far exceed his previous actions.

Part of Mr. Trump's pitch for these tariffs is the potential revenue they could generate. While tariff revenue did increase significantly during his presidency, a portion of it had to be paid out to compensate American businesses affected by retaliatory tariffs imposed by foreign countries. For instance, $23 billion was given to American farmers to offset losses when agricultural exports plummeted.

Despite Mr. Trump's claims of raising trillions of dollars through tariffs, economists assert that the actual revenue generated would likely fall far short of his projections. They also note that tariff revenue could decline over time as consumers shift towards non-tariffed products, and some funds may need to be allocated to compensate exporters hurt by trade wars.

Notably, an analysis by economists at the Peterson Institute estimated that a 10 percent tariff on all imports, along with a 60 percent tariff on Chinese goods, would generate approximately $227 billion annually. However, they acknowledged that this figure may be an overestimate, considering the negative impacts of tariffs on economic growth and the potential appreciation of the US dollar.

As Mr. Trump's proposal gains traction among more Republicans as a means to finance tax cuts, economists urge caution and emphasize the potential repercussions of relying heavily on tariffs to fund various initiatives. It remains to be seen whether the former President's vision of tariffs as a panacea for diverse policy goals will withstand the scrutiny of economic experts.