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business7h ago
The tariffs are raising $100 billion less than Trump expected. Pantheon Macro sees 3 reasons why, starting with China | Fortune
- Tariff revenues are about $100 billion below White House expectations, based on data through late November.
- The expected $400 billion annualized tariff receipts imply an average tariff rate near 12%, well below earlier near-20% forecasts.
- China imports have fallen 30%, and its share of U.S. imports dropped to 9%, with rerouting to Vietnam increasing 6% overall.
- USMCA compliance appears higher than expected, reducing tariff exposure for Canada and Mexico.
- Tariffs on Canada and Mexico show lower realized AETRs than anticipated, boosting exemptions under USMCA.
- A surge in tariff-exempt AI equipment imports partly masks other tariff declines.
- Pantheon projects tariff revenues could recover if current trends persist, but still remain below earlier projections.
- Tariffs are cited as a tax by shoppers and consumers, affecting prices and inflation.
- Analysts warn tariff-driven inflation may persist into 2026, impacting core prices.
- The Fortune analysis attributes the revenue gap to three main factors identified by Pantheon: China trade, USMCA compliance, and AI import surges.
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