Tariffs are back, louder, sharper, and more lucrative than they’ve been in decades. As of mid-June, the federal government has collected over $72 billion from tariffs in 2025, an 81 percent increase from the same period last year. That kind of growth would turn heads in any revenue stream. But when it comes to understanding what this money means, and whether it’s sustainable, context matters more than cash. That’s where the Penn Wharton Budget Model (PWBM) comes in.
Developed in 2017 at the University of Pennsylvania’s Wharton School, PWBM was designed to bring nonpartisan, data-driven analysis into public policy debates. Built on a sophisticated blend of census-based microsimulations, cloud infrastructure, and economic theory, the model simulates how federal policies ripple across households, industries, and the broader economy. Think of it as a laboratory for fiscal policy, one that Congress, journalists, and researchers can all access.
It doesn’t make policy recommendations. It doesn’t take sides. It just runs the numbers, often faster than government offices can. And in the case of tariffs, it provides real-time tracking of Treasury revenue, showing us the rhythm of money as it moves through the system, daily, not quarterly. Using this model, analysts have traced the contours of the current tariff spike. And it’s not just about how high the numbers go. It’s about how they move.
Here are ten key insights that emerge from that analysis, ten reasons why the new tariff revenue is more complex than the headline suggests:
This Is the Highest Peacetime Tariff Revenue in a Century
At $72.6 billion so far this year, tariff revenue is at modern highs. But that number stands alone. Without understanding where it came from, or where it might go, it tells only part of the story.
Tariffs Are Nowhere Near a Replacement for Income Tax
Even with this spike, tariffs bring in just 3 percent of what income taxes generate. The 2024 federal income tax haul was $2.4 trillion. Anyone suggesting tariffs as a viable substitute for that scale of funding is skipping over basic arithmetic.
The Revenue Curve Is Jagged, Not Smooth
Rather than climbing steadily, the Penn Wharton model shows sharp, irregular jumps, reflecting uncertainty, not stability. Revenue spikes and plateaus suggest a fragile system, not a maturing one.
Tariffs on Chinese Goods Are Now at 145 Percent
This level of tariff is virtually unprecedented. While it’s framed as “reciprocal,” it functions more as a blunt instrument. It has restructured the cost of entire supply chains and sent companies scrambling to adapt.
Many Spikes Are Driven by Stockpiling
Businesses aren’t importing more because demand is rising. They’re importing early to beat the next tariff deadline. This front-loading distorts the monthly numbers and makes the revenue look more durable than it is.
Real-Time Treasury Data Is Now a Diagnostic Tool
Thanks to Penn Wharton’s modeling, we no longer have to wait months to understand the impact of trade policy. Daily revenue curves now show how policy announcements ripple into real economic behavior, almost immediately.
Long-Term Revenue May Decline as Trade Adjusts
When tariffs are first introduced, revenue jumps. But over time, import patterns shift. Companies move operations, find new suppliers, or pass on higher prices to consumers, who may then buy less. The result: long-term revenue erosion.
Consumer Behavior Matters More Than Officials Admit
Tariffs raise prices. When they do, consumers often respond by buying cheaper alternatives or delaying purchases. This kind of demand destruction reduces import volume, again, weakening revenue over time.
Policy Instability Breeds Market Uncertainty
Tariffs are being announced, paused, and reimposed at irregular intervals. This kind of policy whiplash discourages long-term planning and makes it difficult for businesses to hedge their exposure to new costs.
The “Stair-Step” Model Tells a Bigger Story
Penn Wharton’s visual curve, a series of steep steps followed by flats, shows us whether new tariffs are producing sustainable gains or just temporary surges. Right now, it looks like the latter. And that’s a red flag, not a ribbon.
So what does it all mean? Tariffs can raise money. That much is clear. But the data shows they do so inconsistently, and not without consequence. Higher prices, shifting trade flows, market instability, and demand suppression all creep in over time. And while $72 billion may sound like a lot, it barely scratches the surface of what it takes to fund a modern government.
What the Penn Wharton Budget Model helps reveal is not just the amount collected, but the conditions under which that money is raised, and what it costs the economy in return. The model is only as good as the data it receives and the assumptions it carries, but in a fiscal landscape often shaped by political intuition, having a nonpartisan engine that shows the mechanics in motion is invaluable.
This is not a screed against tariffs. They have a place in policy when used with precision. But they are not magic, and they are not permanent. They are levers, levers that, when pulled hard, cause the rest of the system to wobble. And the data suggests the wobble is already here.